Why the Dow Tanked Today

U.S. stock markets gave up their winning ways today, trading lower after logging gains for the past four consecutive sessions. For the day, the Dow Jones Industrial Average (INDEX: ^DJI  ) shed 40 points to end 0.3% lower. The other two major U.S. stock indexes also fell, with the S&P 500 and the Nasdaq losing 0.3% and 0.2%, respectively. In the absence of any major macro news event, the market's often-cited "fear gauge," the VIX (INDEX: ^VIX  ) , also shed 1.2%. However, individual stocks still provided plenty of movement for investors to digest.

Around the markets
In keeping with tradition, shares of IPO bust Groupon (Nasdaq: GRPN  ) lost another 9.8%, as survey data from 115 local merchants painted its daily-deal service in an unfavorable light. The data revealed that while merchants who used Groupon did experience an increase in customer volume, those same customers also tend to spend less and return less often than typical customers. Merchants who used the site reported a 53% satisfaction rating, though only 4% reported their experience as "highly profitable." Groupon's stock hasn't been especially profitable for investors, either, since it listed its shares last November. Its stock now sits a brutal 82% lower than its IPO price.

On the upside, Tesla Motors (Nasdaq: TSLA  ) surged 7.1% as Morgan Stanley raised its rating of the electric-car upstart to an overweight rating. As the company prepares to accelerate the release of its next-gen Model S to market, investors have expressed frustrations over the product's seemingly slow ramp-up. However, the company has considerable capacity that should allow it to increase shipments from an estimated 230 this quarter to an expected 15,000 in 2013.

Day to day, markets can send prices of companies miles away from their actual worth. That's why investors will do well to invest in companies with sustainable business models that can perform well over the long term. The Fool recently highlighted three companies on the Dow that should easily stand the test of time. We break down their relative merits and weaknesses in our new research report, which you can grab for free today. Just click here to get started.

Andrew Tonner held no position in any of the companies mentioned in this article. You can find Andrew and all his Foolish writing on Twitter at @Andrew Tonner.

The Motley Fool owns shares of Tesla Motors. Motley Fool newsletter services have recommended buying shares of Tesla Motors. 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. The Motley Fool has a disclosure policy.


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