Halloween may still be a week away, but the stock market's looking plenty scary already. For the second time this week, stocks dropped sharply from the opening bell, and by 10:45 a.m. EDT, the Dow Jones Industrials (^DJI 0.47%) had fallen 240 points.
It's easy to blame the drop on short-term effects from bad earnings reports. Even just among Dow stocks, there's no shortage of those today, with DuPont (DD) leading the way down with an 8% drop after its report this morning. Not only did DuPont miss earnings-per-share estimates by nearly a third, but it also slashed its full-year EPS forecast from $4.20 to a range of $3.25 to $3.30. The sale of its auto-paint division accounts for less than half of the decline. Meanwhile, 3M (MMM 1.04%) matched earnings estimates but fell short on sales and reined in future guidance as well, sending shares skidding more than 3%.
But the real reason for the market's plunge today goes beyond just the latest round of quarterly reports. U.S. investors need to understand that between earnings season, the election, and the fiscal cliff, it's easy to have tunnel vision and ignore the rest of the world. As much as the global economy relies on the U.S., however, there are plenty of other trouble spots internationally that only occasionally rear their ugly heads on domestic news sources.
Most importantly, investors have largely ignored those concerns throughout much of the past several months. The S&P Volatility Index (^VIX -0.13%), which traded during the summer at lows not seen since before the financial crisis, soared 13% today, and the iPath S&P 500 VIX Futures ETN (VXX), which gives investors direct exposure to volatility, has already seen as many shares change hands before 11 a.m. as it typically sees during entire daily trading sessions. With the market overdue for a correction, it looks like that's exactly what the stock market is getting today.