Dow Falls After Geithner's Warning
After the market closed yesterday, a letter from Secretary of the Treasury Timothy Geithner to Congress was released. In it, he warns the politicians that the U.S. government will hit the debt ceiling on Dec. 31. He also says that certain precautions could be taken which would extend the deadline, but didn't give an exact date on which the extension would run out. With that warning, and with investors even more fearful that we will fall off the fiscal cliff, the Dow Jones Industrial Average has dipped again today. As of 12:40 pm E.S.T. the Dow is down 114 points, or 0.88%, and now sits at 12,999. Currently 29 of the Dow's 30 components are trading in the red. Three of the biggest losers are Walt Disney , Bank of America , and JPMorgan Chase .
So why are they down?
For the fourth-consecutive day, shares of Disney are not moving higher. Today it has currently lost 1.66% of its value, and we are only halfway through the trading day. Volume is very light today, as only 2.5 million shares have traded hands, whereas the daily average is 8.6 million. The stock is up 30% year to date, and it is likely that most of the selling today is from investors unloading their winning positions before the end of the year.
Shares of both banking stocks are leading all of the Dow's losers lower today. Bank of America has lost 2.69% and JPMorgan Chase is down 2.39% this afternoon. Similar to Disney, both banks have had strong share price returns during the year -- Bank of America is up 102% while JPMorgan has risen 29% year to date. Taking some of your winnings off the table is common at this time of the year, but with the fiscal cliff just days away, and the possibility of the markets tumbling if we go over it, the pressure to sell big winners is even stronger.
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The article Dow Falls After Geithner's Warning originally appeared on Fool.com.Fool contributor Matt Thalman owns shares of Bank of America and JPMorgan Chase & Co. The Motley Fool owns shares of Bank of America, Walt Disney, and JPMorgan Chase & Co. Motley Fool newsletter services recommend Walt Disney. 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 Motley Fool has a disclosure policy.
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