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Financials Hit the Dow Hard

By Matt Thalman - Apr 3, 2013 at 9:00PM

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Poor job data and lower loan growth rates pull the markets lower.

After yesterday's mixed Institute for Supply Management data and today's jobs report from payroll processor ADP, the markets fell across the board. Of the major indexes, the Nasdaq lost the most, falling 1.11%, while the S&P 500 came in second after shedding 1.05% of its value, and the Dow Jones Industrial Average (^DJI 1.08%) took the third spot after losing 0.76%, or 111 points.

To learn about what the ISM report said and how it affect stocks, click here. Today's jobs report, meanwhile, showed that only 158,000 jobs were created in March, when economists were looking for 200,000. One bright spot from the ADP report was that revised numbers for February indicated that payroll figures for the month actually increased by 237,000, not the 198,000 previously reported.  

Other Dow losers
American Express
(AXP 1.53%) seems to have played follow-the-leader today. Shares dropped 1.76%, as its fellow Dow financial components led the way lower. Bank of America led all Dow stocks after losing 2.8%, and JPMorgan Chase (JPM 0.70%) lost 2.36%. While both American Express and JPMorgan both went ex-dividend today, but AmEx's $0.20-per-share reduction or JPMorgan's $0.30-per-share cut don't make up for their massive loses today.  

The big reason the banks all fell was a report indicating that mortgage loan applications had fallen by 4% last week. In addition, the jobs report indicated that there has been a slowdown in the hiring of construction workers. When we look at both of these data points together, it begins to paint a somewhat concerning picture of the housing market, which happens to be one area that all the major banks have been focusing on to help increase revenues and profits.

Shares of both the Dow big oil stocks fell today. Chevron (CVX 0.35%) dropped 1.03%, which was slightly lower than ExxonMobil's (XOM 0.74%) decline of 0.72%. It's likely that today's poor jobs report, yesterday's disappointing ISM data, and a 2.82% drop in the price of crude today all played a role. The price per barrel of crude fell today after the Energy Information Administration released crude inventory levels this morning, showing a rise of 2.7 million barrels last week. Total commercial inventories are now at 388.62 million barrels, the most since 1990.  

In addition to those reasons, though, Chevron's shares may have also fallen today after shareholders saw the company's SEC filing detailing executive compensation. CEO J.S. Watson was one of many members of Chevron top brass who got big bonuses in 2012; Watson's total salary before bonuses or stock options for 2013 stands at $1.8 million.

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Stocks Mentioned

JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
JPM
$130.35 (0.70%) $0.91
Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
XOM
$97.36 (0.74%) $0.72
Chevron Corporation Stock Quote
Chevron Corporation
CVX
$177.21 (0.35%) $0.62
American Express Company Stock Quote
American Express Company
AXP
$167.90 (1.53%) $2.52
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,989.10 (1.08%) $351.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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