The Dow Jones Industrial Average (INDEX: ^DJI) fell back 97.33 points today, or 0.76%. Amazingly, that relatively paltry loss is the Dow's worst performance of the year. A full 31 trading days into 2012, and the Dow still hasn't fallen by more than 1% in a day.
That's an amazing level of total stability in the market. Last year, 35% of trading days, or 89 days in total, featured the Dow Jones up or down less than 1%. This year, only two out of 31 trading days have resulted in a move more than 1%. That's a total of only 6% of trading days, a very low level of volatility by historical standards.
Still, the widely followed Volatility S&P 500 index, or VIX, was up over 8% today. That's a pretty huge jump for a day when the market was flat throughout the first half and closed down less than 1%. Something tells me the year won't close out with only 6% of days seeing moves of 1% or more.
As we look at a rough day for the Dow, what companies plunged southward? Not surprisingly, some of the biggest losers were in banking. Here's a snapshot of the Dow's three worst performers today.
Bank of America (NYS: BAC)
Caterpillar (NYS: CAT)
Just barely missing the list was JPMorgan Chase (NYS: JPM) , which fell 1.37%. Banking stocks have rallied throughout the early part of 2012, and that rally is largely predicated an economic rebound that would boost the price of houses and other assets on banks' balance sheets. Whiffs of instability will continue to send banking shares crashing faster than their peers in the year ahead.
Then there's Caterpillar. The company is also a candidate for steep falls if sirens are wailing that the global economy is about to hit a speed bump. Caterpillar is a global company that saw 49% sales growth in Asia last quarter. The company sports a higher P/E than many Dow peers based on its heady forward growth projections -- this year the big Cat is expected to grow earnings by 25%. Caterpillar's growth assumptions entail U.S. economic growth of 3% and Asian growth of 6.5%. So, if there's warnings that those projections could be too optimistic, the logical follow-through is that Cat could be too optimistic in its earnings projections for the year ahead.
In the end, while days like today could make you feel queasy, I still think global brands like Caterpillar are great buys and will live up to their potential in the years ahead. Finally, if you're looking to get back into banking but large banks like JPMorgan Chase and Bank of America still have too many unknowns for you, The Motley Fool featured it in its brand-new free report: "The Stocks Only the Smartest Investors Are Buying," which details an under the radar banking play. We invite you to download a free copy -- just click here.
At the time thisarticle was published Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of JPMorgan Chase and Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.