The Dow Jones Industrial Average (INDEX: ^DJI) fell a spectacular 3.8% this week as investors fretted that a new Greek parliament may not be willing to sacrifice its economy with harsh budget cuts. Those cuts were the terms the previous government had agreed to in order to receive bailout money to keep the country afloat and its European lenders from taking losses.

These were the three biggest losers in the Dow this week:

Company

Weekly Change

JPMorgan Chase (NYSE: JPM) (9.4%)
Hewlett-Packard (NYSE: HPQ) (7.3%)
Caterpillar (NYSE: CAT) (7.1%)

In addition to the European fallout, JPMorgan Chase remains under fire for its risk management of a massive derivatives bet that will cost it $3 trillion and counting. JPMorgan is such a heavyweight in derivatives trading -- it has $70 trillion in total notional derivatives contracts -- that its positions can dominate their respective markets, making it susceptible to attacks from other traders when something goes wrong. It appears that's what's happening here; hedge funds know there's blood in the water, and they're pushing losses higher. That being said, the longer this goes on, the cheaper JPMorgan's shares are beginning to appear.

Aside from the clouds hanging over Europe and the global economy, Hewlett-Packard is considering cutting up to 10% of its workforce, apparently to bulk up the company's balance sheet and reinvest in R&D, an area that had seen serious underinvestment under the company's previous CEOs. The company also lost a case against the IRS that will cost it $190 million in taxes it tried to shield in the Netherlands with the help of an AIG (NYSE: AIG) derivatives unit and some European banks. Booking operations through the Netherlands and Ireland is a popular-tax avoidance strategy for lots of large U.S. companies.

Construction equipment manufacturing is especially sensitive to economic expectations. Companies worried about the strength of future sales are less likely to begin a big construction project. And when governments decide to reduce their deficits, that can also involve cutting construction spending on things like roads, bridges, and schools. Caterpillar actually does about a quarter of its sales to Europe, so budget cutbacks and the deteriorating economic situation there can make investors skittish.

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