The Worst Week of the Year for the Dow

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After yet another rough day in the markets, investors should be scratching their heads, and understandably so. The Dow Jones Industrial Average (INDEX: ^DJI) ended the week down 1.6%, marking the largest weekly decline for the Dow thus far this year. But that doesn't fully encapsulate the week's craziness. For the week, the Dow pinballed up and down wildly, swinging more than a percentage point either up or down in four of this week's five trading days. Did that much really change?

This has been an undeniably back-and-forth week for equity investors, and the evidence is clear. The market's oft-cited "fear gauge" of the VIX (INDEX: ^VIX) spiked 13.6% again today, echoing Investor sentiment that the rally we've witnessed since the start of the year might be petering out in front of us.

Around the market
On the Dow, investors especially pummeled financials. Both JPMorgan Chase (NYS: JPM) and Wells Fargo (NYS: WFC) reported quarterly earnings, and both saw substantial slides in their share prices. Although both beat analysts' estimates, their stock prices led the broader markets downward, both falling 3.5% on the day. Bank of America (NYS: BAC) suffered along with its comrades, dropping an astounding 5.3% during the day's trading.


The massive swing in many ways reflects investor sentiment regarding the health of the U.S. and global economies -- and this sector, which saw some of the most impressive gains of the year going into earnings season, certainly limped away from this week's trading action. However, times of mass selling can also beget big-time opportunity for the courageous and long-term-focused investor. In fact, my colleague Anand Chokkavelu recently highlighted Bank of America as an intriguing buy opportunity for several reasons.

Ladies and gentlemen, weeks like this are exactly why investing for the long-term is the only way to play the markets today. To be sure, you have to stay well informed about the recent happenings of your favorite stocks. However, wild swings like this week's often hurt investors' psyches more than they help. They can largely distract us from the most central aim of our saving -- investing for retirement. And no matter what your savings goal, the Fool recently found three stocks that it thinks have the makings of major winners. We detailed them in a free research report for our readers, so access your free copy today.

At the time this article was published Andrew Tonner held no financial position in any of the stocks mentioned in this article at the time of publication. You can follow him on Twitter at@Andrew Tonner. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo and has created a covered strangle position in Wells Fargo.Motley Fool newsletter serviceshave recommended buying shares of Wells Fargo. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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