Why the Dow Fell Again, Ending Its Worst Week Yet
If it felt like all your stocks were drifting downward this week, you're not alone. In fact, the Dow Jones Industrial Average (INDEX: ^DJI) suffered its worst week this year on renewed Europe fears and a terrible week for the banking sector. Today specifically, the Dow ended down a quarter of a percentage point after better-than-expected consumer-sentiment numbers for May were offset by a decline in banking stocks.
|Dow Jones Industrial Average||-34.44 [-0.27%]||12,820.60|
|S&P 500||-4.60 [-0.34%]||1,353.39|
Of course, JPMorgan Chase (NYS: JPM) grabbed the majority of the headlines today, after the bank disclosed after hours yesterday that it suffered $2 billion in losses in only six weeks this year. CEO Jamie Dimon called the loss an "egregious" error stemming from complicated derivative bets that the bank didn't fully understand. Even worse, there could be additional losses of up to $1 billion as JPMorgan tries to exit the trade. Not surprisingly, the stock dropped 9.28% on the day.
JPMorgan's decline also spread to other banks, notably Bank of America (NYS: BAC) . Shares dropped nearly 2% on the day as investors wondered whether the bank might have similar risky trades on its books.
The tech sector seemed to be the bright spot on the day, as Intel (NYS: INTC) and Microsoft both rose more than 1%. Intel reaffirmed both its quarterly and full-year guidance and promised to build chips that Apple "can't ignore" for the iPhone and iPad. The good day for tech also extended outside the Dow, as shares of NVIDIA (NAS: NVDA) rose more than 6%. The company reported earnings of $97.5 million and revenue of $925 million that beat expectations. NVIDIA also announced better-than-expected guidance and confirmed that Tegra growth is on track.
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At the time this article was published Brendan Byrnes owns shares of Apple. The Motley Fool owns shares of JPMorgan Chase, Intel, and Bank of America.Motley Fool newsletter serviceshave recommended buying shares of Intel and NVIDIA.Motley Fool newsletter serviceshave recommended writing puts on NVIDIA. 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.