Why the Dow's Stuck in the Mud

Negative sentiment toward the stock market has dominated trading throughout May, and unfortunately for those looking for a respite from recent declines, this morning has thus far proved to be no exception. With 10 down sessions in the past 11 trading days, the Dow Jones Industrials (INDEX: ^DJI) fell coming out of the gate this morning, with a loss of about 0.3% just before 10:45 a.m. ET. Although U.S. jobless claims data that showed a stable employment picture might ordinarily have pushed the market higher, the highly uncertain status of the eurozone continues to weigh on the markets.

JPMorgan Chase (NYS: JPM) was once again a big loser in the Dow, dropping more than 2% on reports that its derivatives trade gone wrong may have produced an additional $1 billion in losses. With the bank already having disclosed losses of $2 billion, investors have to be concerned that JPMorgan may be at the mercy of competitors seeking to take the other side of its trade and take maximum advantage of its problems.

But Caterpillar's (NYS: CAT) losses were even bigger, adding another 3% drop to its recent pullback. News from mining giant BHP Billiton (NYS: BHP) that the company plans to cut back on its proposed expansion plans shows how commodity producers are getting increasingly pessimistic about future growth prospects. That in turn could hurt Caterpillar's sales of mining equipment, on top of macroeconomic headwinds hitting its construction equipment business.

Finally, Wal-Mart (NYS: WMT) soared more than 5% in early trading as the retailer announced earnings that beat both its own projections and analyst estimates. Same-store sales jumped 2.6%, nearly doubling what Wall Street had expected. The move shows that despite the bad publicity from its Mexican bribery scandal, Wal-Mart can expect its stock to respond more to the fortunes of its business in the long run.

More woes ahead?
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At the time thisarticle was published Fool contributorDan Caplingerdoesn't own shares of the companies mentioned. You can follow him onTwitter. The Motley Fool owns shares of JPMorgan Chase.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool has adisclosure policy.

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