Why the Dow's Falling Down on the Job

These days, it's all about the economy, and for most people, the most important economic indicator is whether they have a job. In that context, today's employment report was disappointing, with only 115,000 new jobs created in April. Although upward revisions to February and March offset part of the shortfall, the weak job market once again raised the question of whether the Federal Reserve would take steps to further stimulate economic activity. Without assurances of more quantitative easing, the Dow Jones Industrials (INDEX: ^DJI) fell more than 1%, with a 135-point drop shortly before 10:45 a.m. EDT. All 30 Dow stocks were down.

Oil took a particularly strong hit, falling all the way down to the $100-per-barrel mark as fears of slower economic activity would presumably create less demand for energy products. Both ExxonMobil (NYS: XOM) and Chevron (NYS: CVX) fell between 1% and 2%, as they have depended on high oil prices to help offset the big drop in natural gas. If oil keeps dropping, then even recent dividend increases won't be enough to keep their stocks from declining along with oil prices.

Bank of America (NYS: BAC) was again the big loser in the Dow, falling more than 3%. Although general economic woes have hammered the bank hard, it's likely that investors bid B of A down in tandem with AIG (NYS: AIG) . The latter was down more than 5% despite an earnings report that featured net income that more than doubled and a strategic turnaround plan that still seems to be on target.

Think about the big picture
If you want powerful stocks for the long run, don't' worry about the Dow's one-day moves. Instead, read The Motley Fool's special report on retirement investing, where you'll find some useful general investing tips as well as three promising stock names that fit well for many investors saving for retirement. Getting access couldn't be easier -- just click here to get your free report today!

At the time this article was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of ExxonMobil and Chevron. 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 Fool has a disclosure policy.

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

Read Full Story