Dow Futures

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 (NYSE: JPM  ) and Bank of America (NYSE: 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 (NYSE: 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 (NYSE: 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.

If you’re looking for a growing company in an economy that’s actually booming, The Motley Fool’s chief investment officer picked his top stock for the year — it’s a company that is revolutionizing commerce in rapidly developing Latin American economies. For a limited time, you can get instant access to the name of this company and a special report for free.

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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If it felt like all your stocks were drifting downward this week, you’re not alone. In fact, the Dow Jones Industrial Average (INDEX: ^DJI  ) suffered its worst week this year on renewed Europe fears and a terrible week for the banking sector. Today specifically, the Dow ended down a quarter of a percentage point after better-than-expected consumer-sentiment numbers for May were offset by a decline in banking stocks.

Of course, JPMorgan Chase (NYSE: JPM  ) grabbed the majority of the headlines today, after the bank disclosed after hours yesterday that it suffered $2 billion in losses in only six weeks this year. CEO Jamie Dimon called the loss an “egregious” error stemming from complicated derivative bets that the bank didn’t fully understand. Even worse, there could be additional losses of up to $1 billion as JPMorgan tries to exit the trade. Not surprisingly, the stock dropped 9.28% on the day.

JPMorgan’s decline also spread to other banks, notably Bank of America (NYSE: BAC  ) . Shares dropped nearly 2% on the day as investors wondered whether the bank might have similar risky trades on its books.

The tech sector seemed to be the bright spot on the day, as Intel (NYSE: INTC  ) and Microsoft both rose more than 1%. Intel reaffirmed both its quarterly and full-year guidance and promised to build chips that Apple “can’t ignore” for the iPhone and iPad. The good day for tech also extended outside the Dow, as shares of NVIDIA (Nasdaq: NVDA  ) rose more than 6%. The company reported earnings of $97.5 million and revenue of $925 million that beat expectations. NVIDIA also announced better-than-expected guidance and confirmed that Tegra growth is on track.

The big picture
While it’s important to pay close attention to the market, it’s also important to not to get too worked up about what happens in the short term. The most successful stock picks are usually great businesses that can grow and continue to succeed over many years. Our analysts have uncovered one such company in our new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company – it’s absolutely free.

The Dow Jones Industrial Average (INDEX: ^DJI  ) declined for the fifth straight day today, losing just over a half of a percentage point. Once again, Europe was the main culprit behind the sell-off, as Greek elections over the weekend raised the prospects of political gridlock in the country.

But while the Dow had a rough day, some blue chips bucked that trend and finished in the green. Here are the Dow’s top three gainers today:

Check out the following video for more insight on the Dow’s drop and why these three Dow stocks outperformed the market today.

The big picture
While it’s important to pay close attention to the market, it’s also important to not to get too worked up about what happens in the short term. The most successful stock picks are usually great business that can grow and continue to succeed over many years. Our analysts have uncovered one such company in our new report, “The Motley Fool’s Top Stock for 2012.” It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company by clicking here — it’s absolutely free.

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LONDON — Futures for the Dow Jones Industrial Average (INDEX: ^DJI  ) , S&P 500, and Nasdaq indexes were all suggesting a fall of about 0.5% in opening trade this morning.