The Dow Jones Industrial Average (INDEX: ^DJI) took a beating today and fell the most since the massive 2.5% sell-off on June 1. Energy is far and away the hardest-hit sector, and even typically steady Dow components ExxonMobil and Chevron fell around 3%. Today's drop erases the entire week's gains, and underscores the market's virtual yawn at the Fed's extension of Operation Twist.

The six-month extension of the program was announced yesterday and has had virtually no effect on trading. Granted, shares ran up a bit in anticipation of the news the week prior, but since the actual announcement, we're trading far lower.

Investors who lined up for trading today got shot down by a firing squad of weak economic data:

  • The Philadelphia Fed manufacturing index fell to -16.6 in June, following a 5.8 drop from May. Today's report contrasted sharply with an expectation for improvement.
  • Existing home sales for May were in line with economists' expectations, but down from the prior month. However, the Housing Price Index from the FHFA was also released and it shows a 0.8% gain, though this is still less than the month before.
  • And then there are jobless claims. While showing a 2,000-claim improvement over the previous week, the four-week average has hit a high for 2012.

What it means
Prepare for a bit of a broken record here: Today's drop and lack of enthusiasm surrounding the Fed's actions underscores the fragility of our overall economy. Now that we've said that, let's figure out how to make some money off it.

Even though the Dow Jones is only up 3.2% for the year, there are some Dow stocks that are absolutely soaring. Bank of America (NYSE: BAC) is up over 40% for the year, General Electric (NYSE: GE) is up almost 10%, American Express is up 20%, Disney has climbed 27%, and Intel (Nasdaq: INTC) is up 10%. Bank of America is a bit of an odd man out here, since its climb stands in contrast to the enormous crash last year and is more a result of ultra-cheap valuation mixed with high trading volume and volatility than anything else.

As for GE, American Express, Disney, and Intel, these companies have all excelled in 2012 because they are great companies, bottom line. They hail from four very different industries, but all are undeniably top dogs in execution.

GE has a track record of quality acquisitions and isn't afraid to make the tough decisions that benefit shareholders tomorrow. The company cut its dividend when it had to, and closed its NBC joint venture to boost cash. GE is in a stronger position today because of it.

American Express owns the closed-loop credit card game, has enviable charge-off rates for the industry, and is a cornerstone in Warren Buffett's Berkshire Hathaway. Disney is perhaps the most powerful force in media publishing and owns the rights to some of the most recognizable characters and brands in the world. Intel stands orders of magnitude larger than its nearest competitor and spends more on research and development than some competitors' entire market caps.

It may sound too good to be true, but at times like this when the seas of instability are churning -- as evidenced by the 14% spike in the Volatility Index (INDEX: ^VIX) today -- we patient investors can crush the market by buying great companies just like these for the long run. It's not rocket science; it's quality investing.

How to find these winners
Sometimes finding a great company may feel like finding a needle in a haystack, but they are out there. They are the stocks only the smartest investors are buying -- investors like Warren Buffett and our own top analysts. I've put some of my own money in these recs, and some of them even pay great dividends. Read more about them here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.