September 17, 2012
The Dow Jones Industrial Index (INDEX: ^DJI ) is taking a breather after last week's heart-thumping action.
The index fell 0.3% in Monday's morning action, with only nine of its 30 components trading in positive territory. It's hard to pin the drop on any particular stock. Bank of America (NYSE: BAC ) lost 2.2% as the S&P credit rating agency slashed its quality ratings on some of the megabank's mortgage papers even deeper into junk status. Cisco Systems (Nasdaq: CSCO ) fell 2.1% as the networking giant agreed to sell its stake in Comviva Technologies to Indian software firm Tech Mahindra.
But these market moves cut just two and three points off the Dow, respectively. Bank of America and Cisco are among the lowest-weighted stocks on the Dow due to their low share prices.
That's why smaller moves by pricier stocks made a bigger impact on the Dow today. Like it or not, that's just how the most-watched market index rolls. Boeing (NYSE: BA ) dropped just 1.5% but reduced the index by eight points, and Caterpillar (NYSE: CAT ) slashed seven points off the index with a 0.9% drop. Investors are backing off last week's raucous gains on Bernanke's infrastructure investment plan.
To learn why Bank of America's drop today shouldn't scare you, read our top finance analyst's premium research report on the stock. You'll learn about the three key areas you must watch and why to buy and sell.
If you're still scared of big finance stocks, don't miss "The 3 Dow Stocks Dividend Investors Need." These rock-solid dividends will build your wealth and help you sleep at night. Click here to read more now.