Why Is the Dow Plunging Again?
The Dow Jones Industrial Average (INDEX: ^DJI) is up to its old tricks again. As of 12:40 p.m. EST, the market's premier value index is down about 66 points, or 0.52%. The Dow has lost a nerve-wracking 557 points since the markets closed on Election Day.
What's up with today's continued drop? At a glance, you might want to blame Bank of America (NYS: BAC) , as the bank leads the Dow downward with a 1.8% dive. Rival (and former Dow component) Citigroup (NYS: C) is under shareholder pressure to break itself up into a bundle of smaller operations, which is a terrifying idea to megabanks with a deeply rooted addiction to economies of scale.
But that's actually just a tiny piece of today's Dow puzzle. Bank of America only took a single point off the index's total value. With a single-digit share price, the stock simply doesn't move the price-weighted index's needle very far.
Boeing (NYS: BA) and Home Depot (NYS: HD) hit a bit closer to the mark. The aerospace and defense giant lost 1.8%, or 10 Dow points, in a double-whammy of looming pension-plan changes and newfound cost-awareness in the Department of Defense. Home Depot is simply giving back some of yesterday's huge gains in a typical display of investors getting carried away. The damage? A 2% drop and 10 more Dow points lost. Yep, Boeing and Home Depot play in the same share price league, casting a shadow over Dow values several times larger than Bank of America's.
That's also why Chevron (NYS: CVX) , with shares sitting north of $100 per stub, inflicted the day's largest Dow drop. A mere 1.7% drop slashed 16 points off the Dow. Construction delays and a rising Australian dollar are inflating the costs of Chevron's natural-gas project Down Under, which was priced at a massive $37 billion to begin with.
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The article Why Is the Dow Plunging Again? originally appeared on Fool.com.Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Bank of America and Citigroup. Motley Fool newsletter services have recommended buying shares of Chevron and Home Depot. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.