Why the Dow Plunged 160 Points Today

You've heard the term "30 out of 30," or some variation of it, before. "Thirty out of 30 doctors agree." "She's made 30 out of her last 30 free throws." "Thirty out of 30 people found the following review helpful." Normally, hearing about such a high percentage of the occurrence of Thing X, we assume that Thing X is a good thing. Well, this time it isn't, as 30 out of 30 stocks in the Dow Jones Industrial Average (DJINDICES: ^DJI  ) fell today, as the blue chip index plummeted 158 points, or 1.21%, to close at 12,938. 

The cause for the systematic fall today was once again the looming fiscal cliff. With only one business day remaining before $607 billion in spending cuts and tax increases kick in, Wall Street was unabashedly pessimistic -- so pessimistic that chemical powerhouse DuPont (NYSE: DD  ) , down 0.8% on the day, was one of the Dow's top performers.

Among the more notable laggards, Hewlett-Packard (NYSE: HPQ  ) occupied a familiar position, leading the lowly Dow in daily losses. Its stock -- the Dow's worst performer in 2012 -- tumbled 2.6% on news that the Justice Department is investigating the botched 2011 acquisition of the software company Autonomy, which HP threw under the bus in November when the company took a $8.8 billion writedown and blamed the impairment charge on "serious accounting improprieties" by Autonomy.

Despite the pervasive gloom and doom in the markets, there were still a few stocks that rose today. MEMC Electronic Materials (NYSE: SUNE  ) , a producer of wafers for semiconductors, added nearly 3% on news that Canadian Solar (NASDAQ: CSIQ  ) is buying four of its solar-power projects. Recently, on Dec. 9, the wealth management firm Collins Stewart upgraded MEMC stock to "buy" from "neutral" and maintained the company's $5.50 price target. 

Shares of business services company R.R. Donnelley & Sons (NASDAQ: RRD  ) also saw uncharacteristic gains today, rallying 1.8% a day after the company announced that it will replace its COO, John Paloian, effective Dec. 31. The company had a rough 2012, memorably botching the release of Google's (NASDAQ: GOOGL  ) third-quarter results. The pre-emptive midday reveal triggered a massive sell-off, causing trading in Google shares to be halted.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.


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  • Report this Comment On December 28, 2012, at 6:34 PM, zone001 wrote:

    The "Hope & Change" Obama promised us in 2008 now translates to "Hope Obama Changes". The man, and his administration, has given our country 4 years of history to review his failures to support the financial community. The idea that his attitude, and administration, is going to change during the next 4 years is not likely. Faced with higher taxes, more government spending, devaluation of the dollar, inflation on all things we buy, continued high unemployment... how in the world can we expect sensible stock market investors to take such a risk and bid the market higher? The 47% Romney referred to, plus other uninformed folks, voted to give Obama another 4 years to continue his erosion of America.

  • Report this Comment On December 29, 2012, at 7:50 AM, funfundvierzig wrote:

    "Chemical Powerhouse DuPont"??

    DuPont in the 21st century is hardly a "powerhouse" any more, having dropped precipitously from being the largest and leading chemical enterprise on the globe for most of the last century down to number 10 in revenues amongst chemical enterprises by 2008.

    DuPont's long lagging shares reached their peak of 84 nearly 15 years ago in 1998 and have not seen 60 since Feb. 3, 2000. Editors who devise the Dow-30 should consider removing this much shrunken, poorly managed organisation from their venerable index as no longer accurately representative of a growing (albeit slowly) American economy. The diminished DuPont is an undeniable drag on the Dow.

    DuPont is a "powerhouse" only in the fluff-filled public relations press kits put out by the Company, a Company, we might add, which has not introduced a new, high-profit blockbuster product or technology from its once fabled labs for some time. ...funfun..

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