The stock market's recent decline got ugly today, as a modestly lower session throughout much of the day turned into a rout in the last half-hour of trading. Bad news in the economy was probably at least partially responsible for the decline, as the Philadelphia Fed's index fell into negative territory, while the index of leading economic indicators dropped 0.1%. The Dow Jones Industrials (INDEX: ^DJI ) ended down falling almost 1.25%, marking the 11th day in the past 12 that the Dow has finished lower.
Although the vast majority of Dow stocks fell, a few suffered particularly hard hits. JPMorgan Chase's decline was easily understandable after the revelation that the bank's bad derivative trade, which it said earlier this week had cost it at least $2 billion, now appears to have led to losses of at least $1 billion more. Given the nature of certain derivative-based positions, it can be extremely challenging to unwind a large stake, and so JPMorgan may be vulnerable to further losses if it can't take steps to hedge what was supposed to have been a hedging transaction in the first place.
But the other big losers in the Dow were more economically sensitive stocks. Home Depot (NYSE: HD ) fell more than 3.5% today, extending its declines following its earnings report earlier this week as the housing market continues to struggle. Although Home Depot has navigated the housing bust fairly well, its shares have already jumped sharply, and so anything short of perfect news seems to be a good excuse for shareholders to sell.
Caterpillar (NYSE: CAT ) fell almost 4.5% after reporting slower growth in equipment sales. Oddly enough, North America was the strongest region for the company, while the emerging Latin American region saw sales shrink by 13%. Although Caterpillar seems to believe that Latin America is recovering and pockets of strength still exist in Asia, a slowing Chinese economy could reverse Caterpillar's growth trend.
Finally, Boeing (NYSE: BA ) dropped 3.5%. The aircraft manufacturer got bad news yesterday from customer Southwest Airlines (NYSE: LUV ) , which said it would put off taking delivery of 30 737-800 airplanes for four years to cut capital spending and avoid overcapacity. The news shows that even though Boeing has gotten a lot of orders lately, they won't always turn into cash as expected.
Down markets seem to last forever, especially if you're fully invested. But even though these Dow stocks were on the losing end today, you can still find smart choices if you're willing to be patient. Check out The Motley Fool's special report on long-term investing and figure out how to escape the day-to-day grind and invest for the long haul. Get your free report today!