The Dow Plunges: The 2 Worst Stocks Today

The Dow Jones Industrial Average (INDEX: ^DJI) fell nearly 1% today after the new Greek parliament failed to form a coalition government. With political opposition mounting, it's becoming increasingly likely that Greece will exit the eurozone rather than see its economy destroyed through austerity. Although in the end the country may have no other choice, leaving the eurozone would be a logistical nightmare for the country and would put further strain on European banks.

Naturally, bank stocks led the plunge today, with JPMorgan Chase (NYS: JPM) and Bank of America (NYS: BAC) falling 3.2% and 2.7%, respectively. Like most "too-big-to-fail" banks, the two have large investment-banking and trading exposure to global capital markets. JPMorgan generated $10.4 billion (39%) of its pre-tax profits from investment banking, whereas B of A earns $5.7 billion in its global banking business.

Citigroup (NYS: C) , which in addition to its investment banking operations also has significant international operations (nearly a quarter of last-year's profits were from Europe), fell more than 4%.

What's more, JPMorgan announced late last week that it expects to lose $2 billion on a derivatives trade gone wrong. Since JPMorgan, along with Goldman Sachs (NYS: GS) , is regarded as one of the most competent banking behemoths, the blowup tarnished not only its image, but also that of the larger trading industry.

In short -- stocks could be in for a bumpy ride in the near term while Europe enters the next phase of its slow-motion financial crisis. For long-term investors, this will eventually pass. And by starting to reverse the current course of unsustainable austerity, Europe and the U.S. have a better chance of avoiding worse outcomes.

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At the time this article was published Ilan Moscovitzdoesn't own shares of any company mentioned. You can follow him on Twitter, where he goes by@TMFDada. The Motley Fool owns shares of JPMorgan Chase, Bank of America, and Citigroup.Motley Fool newsletter serviceshave recommended buying shares of Goldman Sachs. 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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