Two-day declines haven't been all that common for the stock market lately. But after a huge run-up to start 2013, the market finally gave in to pressure for at least a mini-correction. News reports blamed concerns about economic activity, the sequestration debate in Washington, and the Federal Reserve for the decline, but long-term investors shouldn't take a drop in the Dow Jones Industrials (DJINDICES: ^DJI ) of just over 1% over the past two days as cause to believe that a more serious decline is imminent. Although the Dow dropped 47 points today, losses in broader markets were more substantial for the second day in a row, as the Nasdaq Composite (NASDAQINDEX: ^IXIC ) once again fell more than 1%.
Stocks that have benefited from Fed stimulus and hopes for a recovering economy were among the biggest losers today. Bank of America (NYSE: BAC ) fell more than 3%, adding to big losses yesterday as particular fears about the housing recovery have weighed on the banking and homebuilder sector. Moreover, ongoing legal problems will continue to plague the company well into the future, representing arguably the biggest threat that the bank faces right now.
Outside the Dow, VeriFone (NYSE: PAY ) plunged more than 40%, as the electronic payment-systems company gave horrible guidance for both the first and second quarters. Many investors have counted on the potential of electronic payments to revolutionize the financial industry, but with intense competition, VeriFone can't afford to fall behind. Without quick and decisive action, VeriFone may miss out on the full potential that the revolutionary new industry has to offer.
Finally, Heckmann (NYSE: NES ) fell 3%, after having been down more than 10% earlier in the day. Analyst firm Jefferies downgraded the stock, cutting its 2013 earnings outlook by nearly half, as low natural gas prices continue to weigh on activity in shale oil and gas plays. With Heckmann relying on providing water and liquids for use in hydraulic fracturing operations, a slowdown in activity spells trouble for the company, and Jefferies isn't the first analyst to have concerns about Heckmann's future.
Has Bank of America topped out?
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