Dow Futures

The Dow Jones Industrials Average (INDEX: ^DJI  ) got sucker-punched early this morning and fell down over 1%, but it’s recovered about half of the lost ground and is now trading down 0.98%. It’s the same old song and dance that we’ve seen for months now: Europe, with a dash of concern about slowing growth in China. At this point many investors feel like they’ve been watching “My Big Fat Greek Blowup” on repeat and could probably recite most of the lines; debt here, political impasse there, turmoil in the streets, you get the idea.

These worries have flowed through to economically sensitive sectors like banking and energy, with both being the two worst performing sectors today.

It’s not just Europe
The weakness that’s being seen in the banking sector can’t be squarely placed on the shoulders of the Greeks though, as JPMorgan (NYSE: JPM  ) deserves its fair share of the credit as well. The banking giant recently unveiled a $2 billion trading loss and Chief Investment Officer Ina Drew has “retired” on the news. Shares of the bank have skidded hard since last Thursday’s announcement, and continue to drag the broader banking sector with it.

JPMorgan is trading 3.14% lower and Bank of America (NYSE: BAC  ) is down 2.38%. Off the Dow, Citigroup (NYSE: C  ) is dropping 4.29% and Wells Fargo (NYSE: WFC  ) is down 2.5%. Dow Jones investors should consider themselves just a little lucky that financials only make up 9.9% of the index, though, which is far lower than the weightings they’d find on other broad indexes like the S&P or Russell.

At the end of the day I’m of the belief that banking remains incredibly cheap right now. The big finance heavies continue to trade at deep discounts to their historic price-to-book ratios. With that said, though, this sector isn’t for those with a weak stomach. Banking will likely continue to be a volatile sector over the next few years. With more regulation a possibility right alongside more potential balance-sheet landmines in the form of mortgage defaults, the level of uncertainty remains high. For those with a high risk tolerance and a long-term horizon, though, financials may be the best sector for you to be in.

One other option
If you’re still bearish on finance stocks, though, you’re not alone, and there are still huge opportunities out there, including one stock our chief investment officer named The Motley Fool’s Top Stock for 2012. You can learn more about this emerging market retailer before the Wall Street hot shots are keen to the opportunity by just clicking here for your copy of our special free report.

The following video is part of our “Talking Stocks” series, in which Motley Fool analyst Austin Smith discusses trends across the investing universe.

In today’s edition, Austin talks about the Dow Jones Industrial Average (INDEX: ^DJI  ) and whether it’s dead with regard to its original purpose. The Dow is meant to be a quick snapshot of the market and be relatively representative of the universe of security movements. However, the fact that it has only 30 components and is a price-weighted index has thrown it out of whack from a truly illustrative index. Austin compares the Dow with other, broader indices as examples.

While watching the market each day can be fun, it’s also very stressful. Instead, we suggest you tune out the commotion of the day-to-day market and opt for great individual stocks, like The Motley Fool’s Top Stock for 2012. It’s our chief investment officer’s top pick for the year, and it may be yours, too, when you read more about it.

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As of 1 p.m., Dow (INDEX: ^DJI  ) is down 1.3%. Political turmoil in Greece is beginning to call into question whether it will be able to make good on its austerity agreement in exchange for a bailout.

Hewlett-Packard (NYSE: HPQ  ) , as well as macroeconomic bellwethers Bank of America (NYSE: BAC  ) and Caterpillar (NYSE: CAT  ) are down 2%-3%.

The trouble is that deficit-reduction across Europe has plunged the continent into a deeper recession, as lower government spending and higher taxes have stifled economic activity.

Germany, which has been misreading the Euro mess as a crisis of fiscal irresponsibility rather than an economic crisis, hasn’t been keen to accept policies that might actually alleviate the problem, such as higher inflation targets or stimulus spending, opting instead for more cuts.

But Europeans are getting sick of all this failed austerity. France, Greece, and Holland have all seen electoral shakeups of their pro-austerity governments.

In the long term, that’s probably a good thing. The strategy of cutting spending and raising taxes to boost economic growth was never going to work. The sooner it gets reversed, the better.

And not just for economic reasons — economic crises are fodder for extremists. In Greece, a creepy black-T-shirted neo-Nazi party, whose chief platform is harassing immigrants, even received 7% of the vote.

Apparently years of 20% unemployment makes it difficult to repay debts and causes political upheaval. Who knew?

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After falling 1.3% yesterday, the Dow Jones Industrial Average (INDEX: ^DJI  ) closed the week down 1.4%. The red ink was thickest for these three names:

Caterpillar and Bank of America plunged after yesterday’s mediocre jobs report. When jobs are scarce and employers stingy on wages, it becomes harder to pay off household and consumer debt. Two-thirds of B of A’s loans — $600 billion — fall into these categories, so the bank should have a strong interest in full employment. Though JPMorgan Chase (NYSE: JPM  ) , which plunged 3.7% this week, has more extensive trading and investment banking operations than B of A, it of course has quite a bit of exposure to household and consumer debt, too.

It’s a similar worry for Caterpillar. It’s hard to get construction unless we see paychecks that allow consumers to buy things, or government spending picks up.

Unfortunately for Cat, unprecedented budget cutbacks — particularly at the state and local level — continue to decimate transportation construction. Transportation was one of the only sectors of the economy to actually lose jobs after state and local spending cuts subtracted 0.14 points from GDP. And you don’t ordinarily associate tech stocks with economic cyclicality, but Cicso does depend on government contracts for a big part of its business. The company reports quarterly earnings next Wednesday, so we’ll find out soon enough.

One mediocre jobs report doesn’t spell doom, but investors are clearly afraid of a three-peat to the past couple of years, where the recovery seemed strong but ultimately failed to pick up enough steam.

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After a slew of earnings reports, the Dow Jones Industrial Average (INDEX: ^DJI  ) gained 1.6% this week.

But three stocks lagged behind the others:

So what’s going on with these companies?

Wal-Mart
Shares plunged afterThe New York Times revealed that the discount retailer had been systematically bribing Mexican officials to speed up approval of new store construction to get an advantage over competitors. The allegations aren’t particularly surprising, per se; what makes the 8,000-word piece so damaging is its thorough documentation of the bribes as well as the cover-up that seemed to extend up through the highest reaches of Wal-Mart management and how vital Wal-Mart’s Mexican operations have been to its growth.

Procter & Gamble
P&G reported a 16% decline in its net income, which wasn’t actually as bad as analysts had expected. But investors are more concerned about the company’s prediction that weak growth in developed economies, Venezuelan-mandated price cuts, and rising costs could pressure full-year earnings.

Caterpillar
Caterpillar reported a 29% surge in earnings, in large part because of its acquisition of Bucyrus. Although that topped analyst forecasts, it wasn’t enough for investors. Weakness in the market for construction equipment in Brazil and China meant that Cat sales came in lower than analysts had expected.

Wal-Mart, P&G, and Caterpillar were the worst performers this week, but it’s important for us to remember that it’s long-term performance, not daily price fluctuations, that ultimately matter to investor returns. If you’re interested in one stock that our chief investment officer picked to crush the market over the long haul, check out our brand-new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company — and it’s free. 

The Dow Jones Industrial Average (INDEX: ^DJI  ) looks as if it’s calling it quits after its three-month 7% climb that started 2012 with a bang. The Dow fell 125 points, or -0.95%, to close the day at 13,074. It’s down from its 52-week high of 13,331, and it’s flirting with the psychological 13,000 threshold yet again.

The negative news hitting markets today includes the Federal Reserve’s backing away from further quantitative easing, and even more debt troubles from the eurozone. The Dow stocks that took the news the hardest today? Bank of America (NYSE: BAC  ) , Alcoa (NYSE: AA  ) , and Microsoft (Nasdaq: MSFT  ) . While no one likes to see the index down some 1%, putting the year-to-date performance in perspective, today’s drop doesn’t seem so bad — maybe even necessary.

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While it’s always nice to know where the market is headed on a particular day, here at the Fool we think watching it swing wildly one day to the next is a big mistake. Instead, we advocate buying great companies and holding them for the long run. Not only is this better for your portfolio, but it also keeps you sane. Our chief investment officer has recently identified yet another incredible long-term candidate. He’s called it The Motley Fool’s Top Stock for 2012, and you can learn about this stock Wall Street still doesn’t know about by clicking here now.

The Dow Jones Industrial Average (INDEX: ^DJI  ) was basically flat today, while the broader S&P 500 (INDEX: ^GSPC  ) fell 0.3%. But some stocks fared even worse. These were the three biggest losers in the Dow:

Caterpillar and GE received a bit of tough news yesterday from a couple of downbeat economic reports. The ISM Manufacturing index fell to 52.4 from 54.1 in January, meaning growth slowed. (Economists had forecast a much more positive value of 54.7.) And after a couple of strong months, construction spending fell 0.1%, its first decline in a half-year, and to that must be added higher gas prices due to speculation over a possible showdown with Iran. Higher gas prices also have the potential to get passed through to the commodities these manufacturers rely on, so both companies could be in for a rocky road — at least in the short term.

We found out two interesting bits of news about American Express today. The company is launching a payment app for Facebook that allows users to send payments to friends, and they are paying CEO Ken Chenault $23.4 million, 37% more than it did last year. Huge payments to CEOs have obviously become par for the course, and employment and income reports were actually strong, so it’s not really clear why American Express was down today. Maybe because it was up yesterday? These things do happen.

American Express, Caterpillar, and General Electric all underperformed today, but it’s important to remember that what happens to the market on a day-to-day or even week-to-week basis doesn’t matter nearly as much as how our stocks perform over the long run. If you’re interested in one stock that our chief investment officer picked to crush the market, check out our brand-new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company for free by clicking here.

A day after hitting 13,000 for the first time in years, the Dow Jones Industrials (INDEX: ^DJI  ) jumped out of the gate this morning as unexpected strength in U.S. figures for gross domestic product helped send the stock market higher. But the market is also nervous and looking for guidance from the Federal Reserve as Ben Bernanke begins testimony before Congress today. At 10:45 a.m. EST, the Dow dropped below the 13,000 level and was down 24 points to 12,981.

Most of the Dow’s tech contingent traded lower as well, as Intel (Nasdaq: INTC  ) and Hewlett-Packard both fell more than 1% despite the Nasdaq composite touching the 3,000 mark briefly before falling back. Everyone is focusing on Apple (Nasdaq: AAPL  ) eclipsing the $500 billion mark in market cap, but Intel does something the iGiant has been steadfastly unwilling to do: pay a dividend. Intel’s yield of more than 3% has attracted many income-oriented investors for whom Apple shares simply aren’t an option.

Caterpillar (NYSE: CAT  ) also gave up ground today after competitor Joy Global (NYSE: JOY  ) announced earnings. Joy Global posted revenue growth and earnings-per-share growth figures that exceeded 30% each, yet those figures came in below expectations. Nevertheless, it raised profit guidance for the year. That bodes well for Caterpillar, whose mining equipment business needs strength from miners in order to prosper.

If you want the best stocks possible, the Dow may not be your best answer. Learn about the one stock the Fool’s chief investment officer picked to crush the market in this free report: “The Motley Fool’s Top Stock for 2012.” Instant access is just a click away.

While it’s still early enough in 2012 for us all to feel like fortune-tellers, it’s time to read the tea leaves and make bold bets about how certain components on the Dow Jones Industrials Average (INDEX: ^DJI  ) will perform for 2012. After a rigorous reading of the stars coupled with a strenuous gut check, I’ve awarded the following three companies the unenviable title of “3 Worst Dow Stocks for 2012.”

• Travelers (NYSE: TRV  ) , otherwise known as “the most forgotten Dow stock,” was recently nailed by catastrophes that hindered the company’s repurchase plans. Unfortunately these unmodeled events can really nail less diversified insurance companies, like Travelers. Because by their very nature they’re unforeseen, I’m playing it safe and looking elsewhere.

• Merck (NYSE: MRK  ) . Despite a high-flying dividend, Merck has me worried about its patent cliff. Coupled with the analyst projections for five years of market underperformance, and a payout ratio greater than 100%, there are better companies in this space.

• Microsoft (Nasdaq: MSFT  ) is a company I’ve hemmed and hawed about for months. It’s cheap, it has a mountain of cash, and it has a cash-cow product. However, it’s been stagnating for a while now, lacks IP protection abroad, and has been a poor deployer of cash. The recent partnership with Nokia (NYSE: NOK  ) does little to calm my nerves, either, as neither company has done well in the mobile space recently.

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One more stock for 2012
If these companies aren’t going anywhere, investors are probably left wondering where the growth is. The good news is there is one emerging-market play that I’m crazy bullish on for 2012. I’m not the only one, either: Our chief investment officer has dubbed this winner “The Motley Fool’s Top Stock for 2012.” I invite you to get free access to this top pick today by clicking here.

The Dow Jones Industrial Average (INDEX: ^DJI  ) rose once again this week, up 0.3%. But some stocks surged more than others. These were the three biggest losers:

Procter & Gamble was up big on an announcement that it will lay off 5,700 non-manufacturing employees by the end of fiscal 2016, up from the 1,600 in cuts the company had already announced for this year. Cutting 10% of its non-manufacturing workforce will help P&G save $800 million as part of a new plan to save $10 billion over the next five years.

Alcoa rose on an announcement that it will enter a joint venture with China Power Investment to make high-end fabricated aluminum products for various industries in China. Terms weren’t announced, but it could be a big deal based on the sheer variety of products they’ll be making, from aerospace to transportation to packaging. Separately, the aluminum giant offered to double the salaries of 600 workers at an Australian plant that could close down if they move to a new smelter in Saudi Arabia.

Chevron announced that it’s started to look for gas in China’s shale. It’s also beginning phase two of a gas processing plant in Sichuan and delaying a Nigerian gas processing plant. The oil giant did start pumping oil out of the Usan field, a joint project with ExxonMobil, Total (NYSE: TOT  ) , Esso, and Nexen that’s half a mile deep and 60 miles off the Nigerian shore. Total is operating the project, which is expected to produce up to 180,000 barrels of oil per day gross.

Procter & Gamble, Alcoa, and Chevron all beat the market this week, but it’s important to remember that what happens to the market on a day-to-day or even week-to-week basis doesn’t matter nearly as much as how our stocks perform over the long run. If you’re interested in one stock that our chief investment officer picked to crush the market, check out our brand-new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company for free. 

The Dow Jones Industrial Average (INDEX: ^DJI  ) finished up 0.36% today on positive housing and employment data; however, some stocks did much better than the Dow as a whole.

Source: Google Finance.

Source: Google Finance.

Today’s Top 3
1. Today’s leader was Procter & Gamble (NYSE: PG  ) , which finished up 3.07% [$1.98] to end the day at $66.42. The stock rose on news that the company plans to cut 1,600 non-manufacturing jobs by July and another 4,100 by next July. The company’s goal is to reduce costs by $10 billion over the next five years. Fool analyst John Maxfield recently wrote that if he could buy only one stock his pick would be Procter and Gamble. Find out why.

2. IBM (NYSE: IBM  ) was second behind Procter & Gamble today, finishing up 1.93% [$3.74] to end the day at $108.41. The big news is tech today was Hewlett-Packard‘s terrible earnings report, and IBM was probably up on HP’s weakness.

3. JPMorgan Chase (NYSE: JPM  ) took third for the day, up 1.10% [$0.56] to end at $38.57, followed closely by Bank of America (NYSE: BAC  ) , which rose 0.88% [$0.07] to $8.02. Most of the banking sector was up today on positive economic news. Seasonally adjusted home prices climbed 0.7% in December, and new seasonally adjusted unemployment insurance claims remained flat at 351,000, their lowest level since March 2008. Fool blogger Chad Henage believes JPMorgan Chase is the best of the big bank stocks.

The best approach
Watching the broad market each day is exciting, gut-wrenching, and stressful, but investing doesn’t have to be. If you’re in the mood to pick up a great company to buy for the long term, The Motley Fool has created a brand-new free report: “The Motley Fool’s Top Stock for 2012.” It features a company hand-selected by the Fool’s chief investment officer that has a strong future ahead of it. Get access to the report and find out the name of this legendary company. The report is free, but it won’t be here forever, so check it out today.

The Dow Jones Industrial Average (INDEX: ^DJI  ) rose today, briefly breaking the 13,000 level, after the announcement of a bailout of Greece.

Today’s big news is that a 130 billion euro ($172 billion) bailout deal for Greece has finally been reached after weeks of negotiations. A bailout was needed so Greece could avoid defaulting on 14 billion euros in bonds due in March.

Before the deal. Greece had 330 billion euros in aggregate debt. The deal is expected to cut Greece’s debt by 107 billion euros and leave the country with a high 120% debt-to-GDP ratio by 2020. That is far below what it would be without the bailout and lower than the 129% goal previously discussed. The target was lowered as private debt holders agreed to take a 53.5% writedown, above the previously discussed 50%. Investors had been worried that if conditions in Greece and the rest of Europe continued to worsen, the U.S. would also experience a slowdown in growth. This deal should lessen some of those concerns for the time being.

Top stock
Alcoa (NYSE: AA  ) was today’s top stock, rising 2.56% to $10.41. Roughly 20% of Alcoa’s revenue comes from Europe, and the potential of a European slowdown has weighed on the stock the past year. Alcoa was the second worst-performing Dow component last year, behind only Bank of America. There are some things to like about Alcoa, however, and Fool analyst Sean Williams thinks Alcoa will outperform the market over the next few years.

The best approach
Watching the broad market each day is exciting, but investing doesn’t have to be gut-wrenching and stressful. If you’re in the mood to pick up a great company to buy for the long term, The Motley Fool has created a brand-new free report: “The Motley Fool’s Top Stock for 2012.” It features a company hand-selected by the Fool’s chief investment officer that has a strong future ahead of it. Get access to the report and find out the name of this legendary company. The report is free, but it won’t be forever, so check it out today.

While it’s still early enough in 2012 for us all to feel like fortune-tellers, it’s time to read the tea leaves and make bold bets about which components on the Dow Jones Industrials Average (INDEX: ^DJI  ) will outperform for 2012. After a rigorous reading of the stars coupled with a strenuous gut check, I’ve awarded the following three companies the coveted title of Top Dow Stock for 2012.

• Bank of America (NYSE: BAC  ) . The largest bank in the U.S. was the worst-performing Dow stock of 2011, but it’s already erased most of its 2011 loss, and it’s only a few weeks into the year. Considering that the bank trades at a historic low price to book of 0.3, this one has the legs to run up for the next year.

• Already the second-best-performing Dow stock of 2012, Caterpillar (NYSE: CAT  ) has the momentum and macro backdrop to continue digging up profits for investors through this year. A highly cyclical business that swings with emerging-market performance, Caterpillar has indicated great things to come with its recent blowout earnings.

• With big tech as cheap as it is, how could I leave tech titan Intel (Nasdaq: INTC  ) off this list? With its 3% dividend, great track record, and cheap multiples, what’s not to love here?

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One more stock for 2012
As great as these companies are, there is one stock I’m more bullish on for 2012. I’m not the only one, either: Our chief investment officer has dubbed this winner “The Motley Fool’s Top Stock for 2012.” I invite you to get free access to this top pick today by clicking here.

The Dow Jones Industrials (INDEX: ^DJI  ) pushed up 45.79 points today to close up 0.35% for the day. The S&P 500 was hot on its tail, posting a 0.23% gain for the day. The Nasdaq was the only index not invited to the party, closing down 0.27%.

On the whole, the markets have had a great opening to the year. The Nasdaq is up 13%, and the Dow is up 6%. Of course, the biggest news that threatens to shake the market out of its momentum is worries about the Greek debt crisis. Watch for key approvals and progress this Monday.

The biggest losers for the day were Bank of America (NYSE: BAC  ) , Alcoa (NYSE: AA  ) , and Hewlett-Packard (NYSE: HPQ  ) .

Take a look at the video below to see what news investors need to watch for next week. Enjoy the long weekend, and Fool on!

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How to play it
Watching the broad market each day is exciting, but investing doesn’t have to be gut-wrenching and stressful. If you’re in the mood to pick up a great company to buy for the long term, The Motley Fool has created a brand-new free report: “The Motley Fool’s Top Stock for 2012.” It features a company hand-selected by the Fool’s chief investment officer that has a strong future ahead of it. Get access to the report and find out the name of this legendary company. The report is free, but it won’t be forever, so check it out today.

The Dow Jones Industrial Average (INDEX: ^DJI  ) was up for a second day in a row after a second day of positive jobs data. At 10:15 a.m. EST, the Dow was up nine points to 12,725.

Today the Dow is up as jobless claims decreased last week by 12,000 to 367,000. Yesterday the market was up in reaction to data from ADP that showed private-sector jobs grew by 170,000 in January.

Leading the Dow up is Alcoa  (NYSE: AA  ) . The stock is up 1.76% to $10.37. Alcoa was one of last year’s worst-performing Dow components. There are some things to like about Alcoa, however, and Fool analyst Sean Williams thinks Alcoa will outperform the market over the next few years.

The best approach
Watching the broad market each day is exciting, gut-wrenching, and stressful, but investing doesn’t have to be. If you’re in the mood to pick up a great company to buy for the long term, The Motley Fool has created a brand-new free report: “The Motley Fool’s Top Stock for 2012.” It features a company hand-selected by the Fool’s chief investment officer that has a strong future ahead of it. Get access to the report and find out the name of this legendary company. The report is free, but won’t be forever, so check it out today.