After a year-long recovery in the market, stocks have recently taken a turn for the worse. Despite strong corporate earnings for the first quarter and a rebound in consumer spending, investors are now bracing themselves for what could be a major correction or even a bear market.

So what happened?

The European debt crisis that began as a minor issue in Greece has spread like wildfire to the rest of the European Union. The energy sector has been pummeled as the BP oil spill drags on, taking with it the share prices of almost every company involved with exploration, drilling, or services.

In times like this, it's not odd to see drastic movement in your portfolio -- stocks that move by 5% to 10% on barely any news at all.  So let's see which stocks were the biggest market movers yesterday and examine whether or not there was any logic to justify their shift.

Company

CAPS Rating
(out of 5)

Market Cap (millions)

Change in Price (%)

Closing Price

Smart Balance (Nasdaq: SMBL)

****

$245

(24.08%)

$3.91

La-Z-Boy (NYSE: LZB)

*

$534

(16.77%)

$10.23

GameStop (NYSE: GME)

***

$3,138

(5.35%)

$20.71

Source: WSJ online, Yahoo! Finance, Motley Fool CAPS.

Smart Balance, the maker of cholesterol-fighting buttery spreads and other omega-enriched products, took an enormous hit in the markets yesterday. In addition to a downgrade by Northland Securities, Smart Balance slashed its sales outlook for 2010 amid a difficult competitive environment. Furthermore, Smart Balance Milk, which the company had hoped would be a primary growth driver, hasn't gained nearly as much traction as once anticipated. Last but not least, the company is facing difficult pricing pressures. Larger food competitors like Kraft and ConAgra Foods use scale and efficiencies to keep their costs low, whereas Smart Balance has to compete more on product and brand strength.

A weak outlook for 2011 was enough to send furniture retailer La-Z-Boy into a downward spiral. Shares fell by almost 17% after executives cited soft seasonal demand for the first quarter, and said they were concerned about consumer confidence and nagging unemployment.

Despite falling same-store sales and a weak gaming season, Fellow Fool Rick Munarriz thought the silver lining for video game retailer Game Stop was its used-game business. However, Best Buy (NYSE: BBY) just announced that it would start its own trade-in service for used games, sending GameStop shares plummeting. This adds to an already competitive marketplace: Wal-Mart Stores (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) have entered the used-games space as well. Despite all this, some investors still see reason to be bullish on GameStop -- read CAPS member mghaynes1's lengthy analysis right here.

The Foolish bottom line
In the choppy waters of today's market, you've got to watch your portfolio carefully -- but be careful to distinguish between random volatility and a true change in fundamentals. If your stocks are jumping all over the radar screen, but your investing thesis remains intact, just sit back and hold on for the ride.

Jordan DiPietro owns shares of Smart Balance. Best Buy and Wal-Mart are Motley Fool Inside Value picks. Smart Balance is a Rule Breakers recommendation. Amazon and Best Buy are Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on Best Buy and writing covered calls on GameStop. The Fool owns shares of Best Buy. The Fool has a disclosure policy.