Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



"Plan B" Failure Gives Investors a Holiday Discount

Stocks are dropping across the board in a sell-off fueled by the failure of Speaker Boehner's "plan B," which never had a chance of becoming law anyway. Stockpile canned goods and ammo before the end of the world! Or was that supposed to happen a few hours ago?

Chill, people -- we're in the same place we were yesterday, when stocks jumped on hope that the president and Congress would reach a deal. The only reason the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) are down 1% each is fear, but we're still closer to a deal and in a better market than we were a week ago. In fact, both indexes are above last Friday's close, so the sell-off hasn't eaten away the week's gains.

There's not a single Dow stock in the black today, so I don't even have any good news to report. Banking and infrastructure stocks are taking the brunt of the fall today. Bank of America (NYSE: BAC  ) is down 2%, while Caterpillar (NYSE: CAT  ) and Alcoa (NYSE: AA  ) are down 2.2% and 1.8%, respectively. The fear is that going over the fiscal cliff will push us into recession and hurt the fragile housing and construction markets, which would hurt business for these companies. The third quarter's strong growth contradicts that argument, and we may not see the dire consequences some people fear.

The fiscal-cliff talk is also pushing oil 1.6% lower and gold 0.7% higher on the day. This put a dent in ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) , which fell 1.8% and 1.3%, respectively.

Like I said earlier, "plan B" was never going to pass in the first place, so the cancellation of its vote last night didn't really impact a deal that actually could pass. The market is just reacting to short-term fear that a deal won't be reached -- which spells opportunity for the savvy investor. The long-term thesis for stocks hasn't changed dramatically in the last 24 hours, so today's market dip may offer a great buying opportunity. Take that same mindset into the next two weeks as the market gyrates based on the day-to-day progress of negotiations.

Want to learn more about B of A?
To learn more about the most talked-about bank out there, check out our 
in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2166592, ~/Articles/ArticleHandler.aspx, 10/26/2016 9:22:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 minutes ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:00 PM
AA $27.79 Up +0.50 +1.83%
Alcoa CAPS Rating: ***
BAC $16.87 Up +0.15 +0.90%
Bank of America CAPS Rating: ****
CAT $84.13 Down -0.35 -0.41%
Caterpillar CAPS Rating: ***
CVX $101.19 Up +0.42 +0.42%
Chevron CAPS Rating: ****
XOM $87.09 Up +0.37 +0.43%
ExxonMobil CAPS Rating: ****