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Why the Dow Slumped 138 Points Today

By John Divine - Apr 17, 2013 at 6:08PM

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Third consecutive day of 100-point swings as financials and technology sectors suffer.

A broad market sell-off today gave up nearly all of the Dow Jones Industrial Average's (^DJI 0.15%) gains from Tuesday, as blue chips took a hit on disappointing earnings. Just four of the Dow's 30 stocks advanced, and the index lost 138 points, or 0.9%, to close at 14,618 Wednesday.

One of those lucky few trading higher today was health0care behemoth Johnson & Johnson (JNJ 1.09%), which added 0.6% after its impressive quarterly report yesterday. The fact that the company could boost sales 8.5% shows the company is executing well and can still find areas of growth a full 127 years after going into business. Medical sales, prescription drugs, and over-the-counter medications all grew at double-digit rates, and when you combine that with a 2.9% annual dividend, the stock looks pretty appealing right now.

But a healthy dividend alone does not an attractive investment make. Hewlett-Packard (HPQ -0.83%), which pays a 2.5% dividend of its own, lost 2.6% today. Unfortunately, today was just not a great day to be a technology investor, as the sector fell more than any other Wednesday. Not only was HP guilty by association today, but with PC shipments declining more than ever before in the first quarter, investors have legitimate company-specific concerns of their own.

Finally, with the financial sector logging 1.8% losses today, the largest two laggards of the day are two of the biggest banks in the land. JPMorgan Chase (JPM 1.41%) shares slipped 3.5%, seemingly more because its peer and competitor Bank of America (BAC -0.61%) announced subpar results than because of anything JPMorgan itself did.

The 4.7% decline in Bank of America's stock Wednesday came after B of A made about 13% less than Wall Street was expecting in the first quarter. Even as earnings per share rocketed from $0.03 to $0.20, a number of unique charges depressed earnings last year, and analysts were expecting figures closer to earnings of $0.23 per share.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,928.62 (0.15%) $48.38
Bank of America Corporation Stock Quote
Bank of America Corporation
BAC
$35.65 (-0.61%) $0.22
JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
JPM
$126.36 (1.41%) $1.76
HP Inc. Stock Quote
HP Inc.
HPQ
$34.77 (-0.83%) $0.29
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$181.40 (1.09%) $1.96

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

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