The Dow Falls to Its Worst Month in 2 Years

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The Dow Jones Industrial Average's (INDEX: ^DJI) drop today was a fitting end to a horrible month in which the blue-chip index fell 6.2%, good for its worst month in exactly two years. Today's decline can be blamed mostly on U.S. economic data that disappointed investors. The number of Americans applying for jobless benefits rose again last week for the fourth consecutive week. That was on top of revised estimates from the Commerce Department that showed GDP growth last quarter was actually 1.9%, down from the 2.2% previously projected.

Although markets in Europe actually had a good day today, the continent was the main catalyst behind the Dow's drop this month. All eyes are now focused on Greek elections scheduled for June 17, which will help determine whether Greece will remain in the eurozone. Investors also continue to be concerned with the health of Spanish banks -- in particular how the country will pay for a bailout of its third largest lender, Bankia.

Here's how the three major U.S. indices fared on the day:

Index

Change

Ending Value

Dow Jones Industrial Average-26.41 [-0.21%]12,393.45
Nasdaq-10.02 [-0.35%]2,827.34
S&P 500-2.99 [-0.23%]1,310.33

Turning to individual stocks, the Dow was roughly split, with 14 of the 30 blue chips finishing the day in the red. By far the biggest loser on the day was construction equipment giant Caterpillar (NYS: CAT) . The company's drop was mainly due to poor guidance from rival mining equipment maker Joy Global (NYS: JOY) . Joy lowered its fiscal 2012 earnings-per-share outlook by $0.35, and reduced its revenue forecast by $100 million. CEO Mike Sutherlin said that "continuing uncertainty will keep mining companies cautious" in ordering new equipment. That wouldn't be good news for Caterpillar, which recently made a big bet on the mining sector, with its largest ever acquisition of mining equipment maker Bucyrus International.

Bank of America (NYS: BAC) was the clear winner on the Dow today, as the company's stock rose more than 2%. Bank of America has been the one of the most volatile stocks on the Dow this year, but it's also been the best performer. Shares are up more than 32% year to date versus 1.4% for the Dow as a whole.

Outside the Dow, Facebook (NAS: FB) , down nearly 4% as late as 2 p.m. ET, managed to make a huge comeback and finished up 5% at close. It was welcome relief for Facebook investors, who have had to watch the stock fall more than 22% from its IPO price. Investors have had to digest many events for Facebook's stock this week, including rumors of a possible takeover of Web-browser company Opera Software, the rumors of a possible Facebook smartphone, and the beginning of options trading of the stock.

The big picture
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At the time this article was published Brendan Byrnes owns shares of Caterpillar. The Motley Fool owns shares of Bank of America, Facebook, and Joy Global. 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.

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