Dow Falls Hard as Investors Grow More Fearful

For the third day in a row, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) has moved more than 100 points. On Monday the index closed lower by 265 points, yesterday is was up 157 points, and today it's falling hard, down 171 points, or 1.16%, as of 12:55 p.m. EDT.

The S&P 500 and the NASDAQ are faring even worse, down 1.8% and 2.2%, respectively. The main cause for this week's drops has been earnings reports that missed analysts' expectations.

Bank of America (NYSE: BAC  ) is easily leading all Dow losers today, down 5.9% even though the company reported that profit quadrupled in the first quarter of 2013 compared with the prior-year quarter. My colleague Alex Dumortier said it best this morning when he discussed why shares were falling: Simply put, expectations were higher than the results. Wall Street wanted $0.22 per share in earnings, but B of A posted $0.20 per share in the first quarter, causing shortsighted investors to flee the stock today. On the other hand, long-term investors should be rejoicing today's earnings release, as it shows the company has turned the ship around and is producing a strong, growing profit.

Bank of America's "poor" results also have investors bailing on JPMorgan Chase (NYSE: JPM  ) , whose shares have fallen 3.7%. JPMorgan just posted its own earnings last week, and although the bank beat on earnings per share, it missed slightly on revenue. The bank did release some $1.15 billion of loan loss reserves, which investors didn't like seeing, though it added substantially to the bank's bottom line and helped it beat earnings. But regardless, investors seem to be acting irrationally today: JPMorgan just told investors how the company is performing, so there shouldn't be any near-term surprises.

A few of the Dow's big technology stocks are also tanking in a big way today. Shares of Hewlett-Packard (NYSE: HPQ  ) are down 2.4%, while Cisco (NASDAQ: CSCO  ) has fallen 2.2%. With no real negative news pertaining to either company, investors seem to be growing nervous as we head deeper into earnings season without having seen any home-run reports so far. Hewlett-Packard is set to release quarterly results on May 21, and Cisco will report on May 15, so investors still have nearly a month to tweak their expectations.

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