Why the Dow Took a 300-Point Beating Today

The day after 100-point gains in the Dow because the market supposedly cheered an impending "decisive" election, the nation woke up to decisive results, only to see markets plummet as a result. Every single Dow Jones Industrial Average (INDEX: ^DJI  ) component was down today, and the market dropped 312 points, or 2.36%, to fall to 12,932. It was the Dow's worst drop in all of 2012, and today marks the first time the index has closed under 13,000 in three months. 

Leading the Dow lower was its worst performer, Bank of America (NYSE: BAC  ) . The combination of President Obama's re-election and the victory by Democratic Massachusetts Senate candidate Elizabeth Warren could mean tougher regulatory environments than big bank investors would like going forward. Not far behind Bank of America's 7%-plus plunge on the day was another big bank, JPMorgan Chase (NYSE: JPM  ) , which also fell more than 5.6% on similar fears of heightened regulation.

Two other factors playing a big role in today's panic were worries over the fiscal cliff, possibly on Jan 1, and subsequently the downgrade of U.S. sovereign debt as a result, which Fitch has warned can be expected.

The top-performing stock in the Dow today was Disney (NYSE: DIS  ) , which lost only about 0.8%. The entertainment company reports quarterly results tomorrow, and analysts expect increasing traffic at its theme parks around the world to drive results. 

Today was one of fewer than than 60 times that the Dow has ever fallen 300 or more points in a single day. Rounding some of the more notable laggards in the Dow was ExxonMobil (NYSE: XOM  ) , which fell nearly 4% today. If the economy does indeed slow down as we approach the crucial time for a decision on the fiscal cliff, energy companies will doubtlessly be hurt by decreased consumer demand. Exxon may also be feeling the lingering effects of Hurricane Sandy and lower oil prices.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, I invite you to read our premium research report on the company today. Click here now for instant access to our best expert's take on JPMorgan Chase.


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