Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Anadarko Petroleum (NYSE:APC) dropped as much as 12% in early trading after a legal ruling went against the company.

So what: A U.S. bankruptcy judge said Anadarko could be liable for $5 billion or more in environmental and legal liabilities related to its acquisition of Kerr-McGee in 2006. The real culprit is Tronox, which was spun off from Kerr-McGee in 2005 in an effort to rid the company of liabilities before being acquired.  

Now what: Estimates for Anadarko's liabilities from both the company and analysts had been far lower than the $5.2 billion to $14.2 billion in damages estimated by Judge Allan L. Gropper. That's why there's such a strong reaction on the market today. As with most legal proceedings, this could drag out for years before a final ruling but it's apparent that Anadarko will have a major liability on its hands, which is a big deal even for a company of its size.