What's Behind These 3 Dow Stocks' Losses

The stock market opened the week on a sour note, with most analysts blaming worries in Europe for the declines. After falling much more sharply at the open, the Dow Jones Industrial Average (INDEX: ^DJI  ) ended down 102 points to 12,927. The S&P (INDEX: ^GSPC  ) and Nasdaq suffered similar percentage losses, while foreign markets were generally down much more sharply.

Let's take a look at some of the Dow's worst performers to see whether we can get a flavor for what pushed the Dow down today.

Wal-Mart (NYSE: WMT  ) , down 4.7%
Europe may be on most investors' minds today. But for Wal-Mart, the problem is squarely directed at Mexico.

The Department of Justice is investigating allegations that executives at Wal-Mart's Mexican subsidiary bribed Mexican government officials to help get stores opened. Although some analysts have said that any probe is unlikely to have a material impact on Wal-Mart's overall business, the cloud of scrutiny under the U.S. Foreign Corrupt Practices Act only adds to the challenges the retailer has faced in recent years. Wal-Mart needs to resolve this problem quickly to avoid getting stuck in a quagmire of controversy.

Bank of America (NYSE: BAC  ) , down 2.3%
After beating earnings expectations, you'd think that B of A would be out of the woods. But as long as Europe is in crisis, the bank is likely to have to deal with worries about European contagion.

More worrisome for B of A is the idea that the banking industry will eventually divide into strong and weak players. So far, investors are treating B of A as a definite representative of the weak camp -- and unless it can not only get its capital situation under control but also integrate its acquisitions from the financial crisis, B of A may have trouble making the leap.

General Electric (NYSE: GE  ) , down 1.5%
GE announced earnings last Friday, and a couple of firms raised their price targets on the stock in response. Yet after gains Friday, the optimism went away today.

GE does enough business in Europe that it could get hurt by an economic recession there. As that looks increasingly likely, you have to expect GE to see its prospects dim somewhat, despite some excellent prospects both in the U.S. and in other parts of the world. A lower stock price might actually provide a nice buying opportunity for the stock if you believe that Europe's declines will be short-lived.

Stay tuned
These stocks didn't do well, but plenty of their peers will give investors good news when they make their earnings announcements in the days and weeks to come. The Motley Fool has some useful new information on first-quarter earnings in its special report, which reveals five stocks that investors simply have to watch this earnings season. But don't delay; accept this special invitation before these companies report.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter. The Motley Fool owns shares of Wal-Mart and Bank of America. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.


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