Why the Dow's Plunging Faster Today

The one thing you can count on from the market is that just when you think you have it pegged, it does something completely unexpected. Although many people have been calling for a correction for months now, the spring-loaded pullback that we've seen in recent days isn't exactly what everyone had in mind. Yet suddenly, all sorts of fears that everyone had dismissed as late as last week are now back on the table, and stock investors are fleeing in droves. At around 2:45 p.m. EDT, the Dow Jones Industrials (INDEX: ^DJI  ) were down 196 points to 12,733, while the S&P 500 dropped 22 points to 1,360.

Most Dow stocks are down, but a few are bucking the trend. Pfizer (NYSE: PFE  ) shares are up today despite a court ruling saying that the company may have to face some suits related to asbestos claims against its bankrupt Quigley subsidiary. Although the company funded a settlement pool with about $430 million, it only covered 80% of potential plaintiffs. The ruling could extend an already decades-long process for years to come.

Wal-Mart (NYSE: WMT  ) was down less than half a percent after Best Buy (NYSE: BBY  ) CEO Brian Dunn resigned. Although electronics make up only part of Wal-Mart's retail empire, they've become an increasingly important part of the equation as the company has become a distribution channel for iPads and iPhones as well as other popular devices. Wal-Mart may benefit from Best Buy's weakness, but it shouldn't expect the big-box electronics specialist to go down with a fight.

Finally, Intel (Nasdaq: INTC  ) is down more than 1% today. The company was today's feature in the Fool's Right for Your IRA series, in which Fool contributor Sean Williams went through the company's biggest growth opportunities. With moves into mobile devices and cloud computing while retaining a lock on the PC microprocessor business, Intel stands poised for long-term success.

Some perspective
Even with the Dow's recent losses, we're still only down to levels we last saw in early March -- and we've kept the lion's share of the market's gains since last October. But if you'd rather put your money into a company that stands to outpace the broader market over the long haul, you'll want to read the Motley Fool's free report on the top stock for 2012. The report features a company hand-selected by the Fool's chief investment officer that has a strong future ahead of it. I invite you to take a copy, free for a limited time. Get access to the report and find out the name of this legendary company -- but don't wait; do it right now.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Intel and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Wal-Mart, Intel, and Pfizer, as well as creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


Read/Post Comments (8) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2012, at 3:18 PM, Myrddraal wrote:

    Yeah.... uhm.... so here's the thing: 1) Unemployment is in the toilet, regardless of what you read on CNN about filings; 2) Fuel prices are and will continue to rise; 3) As a country, we are $17 TRILLION in debt; 4) Europe is bankrupt - no really,... they are broke. They should sink and die; 5) Inflation is and will continue to accelerate rapidly in the next 9 months; So where does that leave us?? And you guys have to act surprised? I hope the DOW goes to 5,000. Seriously. Take of the band-aid and fix the broken arm...... jeez.

  • Report this Comment On April 10, 2012, at 3:19 PM, Myrddraal wrote:

    Forgot to add one thing: So with high fuel prices, where do you think corporate profits are going to be in 12 months?

    LOL.... Weeeeeeeeeeeeeeeeeeeeeeeee!!

  • Report this Comment On April 10, 2012, at 3:29 PM, joseph1954 wrote:

    Waiting for the up tick when the panic ends then I'm back in with both feet. Ford, BAC WFC, Ready and waiting, I love making money on this roller coaster!

  • Report this Comment On April 10, 2012, at 4:45 PM, setht23 wrote:

    @ Myrddraal lol So another person predicting the end of the world. I've been hearing this since I was able to listen/watch/read the news. My favorite example is how the Russian Orthodox Church has predicted the end of the world at least half a dozen times now. Basically my point is people like to exagerrate and predict the worst. It sells newspapers and gets people to tithe to save their souls. In the end it won't happen. The worst that'll happen is Europe collapse and we lose a large chunk of our exports.

    But to put that in perspective our GDP is about 15 trillion, our exports total about 1.5 trillion of which about 1/4 are to Eurupe. That means 2.5% of our economy relies on Europe. Which means if Europe ceases to exist the stock market in general will lose 2.5% of it's value. Which would currently value the DOW at 12,398.

    As far as fuel prices there are many companies you can invest in that will profit off of that. With unemployment I think you are being overly skeptical, but if anything the market has shown it can do just fine with the unemployment where it is now. And if you're worried about inflation stocks are one of the better investments you can make, unless of course you like to store chunks of metal in your house. Stick all you money in your savings account and things will be much worse.

    I think the market is acting irrationally to news we already knew about and I'm buying. If you want to sell go ahead sell I'm willing to make a buck off you. And remember the Russians. The end of the world hasn't happened yet, and when it does who cares, it's the end of the world.

  • Report this Comment On April 10, 2012, at 5:02 PM, FutureMonkey wrote:

    Ahhhhhh...run for the hills. Liquidate portfolio and invest in guns, ammunition, canned goods, and gold coins to bury in your yard.

    Actually, hold on. I'm no expert on the history of the stock market but I believe 2 consecutive down days has happened before.

    My guess is that large money funds are anticipating a pull back after a remarkable run to begin the year and many are pocketing gains; momentum traders could be playing a role in anticipation as well.

    I'd also love to see a pull back to below 10000 since that will give me plenty of opportunity to buy valuable properties at a lower price point. But, I'm not betting the farm on seeing anything below 11000.

    Steady dollar cost averaging and bold leaps when offered outstanding opportunities makes for steady eddie portfolio and a happy future. Of course don't invest anything you might need in an emergency or a dramatic decline in the market.

    If you are fearful of the future, I'd dollar cost average out the same way I dollar cost averaged in. Seems foolish to jump in and out with large amounts of money based on an emotional response.

    FM

  • Report this Comment On April 10, 2012, at 5:43 PM, hbofbyu wrote:

    Seth123,

    That's a great last line (I'll remember it).

    However, I have nothing to fear about the end of the world, it's the end of the world as WE know it or a drastically changed world that I fear.

  • Report this Comment On April 11, 2012, at 6:39 AM, nmartell22 wrote:

    I don't think it's gas prices or investor panic forcing the Dow down. I've been following the financial news website MarketSnacks too because it provides quick, interesting, daily summaries of what happened in the markets. I thought their post yesterday on Alcoa's corporate earnings and why the markets have dropped was really helpful explaining why:

    http://marketsnacks.com/2012/04/10/spanish-bond-sell-off-lea...

  • Report this Comment On April 11, 2012, at 11:37 AM, Myrddraal wrote:

    @seth123 - Think whatever you want Seth. I read the financial information at the Bureau of Labor Statistics and the Bureau of Economic Analysis. All arrows point to problems.

    I'd LOVE to be optimistic. Hell, I'd like to see the DOW go to 20,000 - but right now, based upon the current deficit spending, along with other leading indicators for issues in our country, along with other countries around the world, I'm going to sit on top of my pile of cash and watch the train wreck from my lawnchair. - with a Corona and a pile of nachos!! :)

    It's comin..... but until then, I'm fine taking 3-4% in guaranteed-return type investments, as well as playing the futures markets to ride the ebbs and flows. I'm making money, but I'm not betting the farm right now. Just sayin............. ;)

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