Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Dow Plunges: The 2 Worst Stocks Today

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The Dow Jones Industrial Average (INDEX: ^DJI  ) fell nearly 1% today after the new Greek parliament failed to form a coalition government. With political opposition mounting, it's becoming increasingly likely that Greece will exit the eurozone rather than see its economy destroyed through austerity. Although in the end the country may have no other choice, leaving the eurozone would be a logistical nightmare for the country and would put further strain on European banks.

Naturally, bank stocks led the plunge today, with JPMorgan Chase (NYSE: JPM  ) and Bank of America (NYSE: BAC  ) falling 3.2% and 2.7%, respectively. Like most "too-big-to-fail" banks, the two have large investment-banking and trading exposure to global capital markets. JPMorgan generated $10.4 billion (39%) of its pre-tax profits from investment banking, whereas B of A earns $5.7 billion in its global banking business.

Citigroup (NYSE: C  ) , which in addition to its investment banking operations also has significant international operations (nearly a quarter of last-year's profits were from Europe), fell more than 4%.

What's more, JPMorgan announced late last week that it expects to lose $2 billion on a derivatives trade gone wrong. Since JPMorgan, along with Goldman Sachs (NYSE: GS  ) , is regarded as one of the most competent banking behemoths, the blowup tarnished not only its image, but also that of the larger trading industry.

In short -- stocks could be in for a bumpy ride in the near term while Europe enters the next phase of its slow-motion financial crisis. For long-term investors, this will eventually pass. And by starting to reverse the current course of unsustainable austerity, Europe and the U.S. have a better chance of avoiding worse outcomes.

If you're looking for a growing company in an economy that's actually booming, The Motley Fool's chief investment officer picked his top stock for the year -- it's a company that is revolutionizing commerce in rapidly developing Latin American economies. For a limited time, you can get instant access to the name of this company and a special report for free.

Ilan Moscovitz doesn't own shares of any company mentioned. You can follow him on Twitter, where he goes by @TMFDada. The Motley Fool owns shares of JPMorgan Chase, Bank of America, and Citigroup. Motley Fool newsletter services have recommended buying shares of Goldman Sachs. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (13)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1887034, ~/Articles/ArticleHandler.aspx, 10/21/2016 11:42:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
BAC $16.67 Up +0.11 +0.66%
Bank of America CAPS Rating: ****
C $49.57 Down -0.01 -0.02%
Citigroup CAPS Rating: ***
JPM $68.49 Up +0.23 +0.34%
JPMorgan Chase CAPS Rating: ****
GS $174.67 Up +0.16 +0.09%
Goldman Sachs CAPS Rating: ***