Why the Dow Is Dipping This Morning

Probably the last thing anyone would have expected after an evening full of important earnings announcements -- including the much-awaited Apple (Nasdaq: AAPL  ) report -- was for the stock market to trade near breakeven. But even after Apple failed to knock its third-quarter report out of the park, it bounced back from an initial after-hours drop last night and managed to limit its losses to just half a percent. Even though U.S. gross domestic product growth reached a faster-than-expected 2% in the third quarter and consumer sentiment rose to a five-year high, the Dow Jones Industrials (INDEX: ^DJI  ) has sunk 36 points as of 11 a.m. EDT.

One victim of the market's more measured moves over the past few days has been volatility. The modest decline has pushed the Volatility Index (INDEX: ^VIX  ) , which measures immediate volatility expectations in the S&P 500 options market, up a bit this morning. But it has slid by more than 7% from Tuesday's highs in the midst of the Dow's second big drop in three trading sessions. Still, taking a slightly longer-term view, the iPath S&P 500 VIX Short-Term Futures ETN (NYSEMKT: VXX  ) , which tracks volatility futures contracts a month out, has seen a much more modest drop of less than 3%. That suggests that investors aren't convinced that the bumpy ride for stocks is over yet.

Among Dow stocks, financials were the big losers, with Bank of America (NYSE: BAC  ) and JPMorgan Chase (NYSE: JPM  ) both down more than 1.6%. A report from The Wall Street Journal cited a source who said that B of A was among banks that received subpoenas from the New York Attorney General in connection with the LIBOR-fixing scandal. JPMorgan confirmed that it received a subpoena in August, shortly after news of the scandal initially broke. The last thing either bank needs right now is another legal problem, but that, unfortunately, is likely to be what both banks have to face for the foreseeable future.

Getting past earnings
Even as earnings season continues, investors are starting to look forward to what next quarter's numbers will bring. For instance, with Apple, the launch of the iPhone 5 barely even showed up in last night's report. To find out whether Apple's a buy right now, you really need to look forward to earnings that won't come out until next January. Get your inside look today with the Fool's premium report on Apple, where you'll learn everything you need to know about the company and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

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