Bank of America Corp (BAC), Alcoa Inc (AA), Verizon Communications Inc. (VZ): What Caused the Dow to Drop?

Editor’s note: This article was originally published yesterday, after market close.

Earnings and expectations are ruling Wall Street this week. As we move deeper into earnings season, investors are focusing more on actual results, and it’s becoming very clear that those earnings are driving the markets, not the hot news story of the day. And regardless of whether the market moves up or down for the day, it is very refreshing to see this happen.

Bank of America Corp (NYSE:BAC)

But what is still disconcerting is that although earnings and, in some cases revenues, are climbing, shares prices are dropping simply because analysts expected better results than what is being reported. This is preciously what happened today. Bank of America Corp (NYSE:BAC) released first-quarter earnings, and profit quadrupled to $0.20 per share, but Wall Street expected $0.22 per share and the stock fell 4.72% during the day, and with the help of another 25 components, managed to pull the Dow Jones Industrial Average (INDEXDJX:.DJI) lower by 138 points, or 0.94%, during the day.

More Dow losers
Shares of Alcoa Inc (NYSE:AA) were on the losers’ side again, after the stock fell 1.73% today. Alcoa Inc (NYSE:AA) is already down 8.29% since the start of 2013 after falling 5.9% in 2012 and 43.7% in 2011. You have to go back to 2008 to find a full year when Alcoa Inc (NYSE:AA)’s stock rose higher. The company faces a number of heads in the future, increased competition from smaller local producers also in China, which is likely the cause for the oversupply in the country, and when supply outpaces demand, aluminum prices decline. To learn the three reasons my Foolish colleague Taylor Muckerman believes you should sell Alcoa Inc (NYSE:AA), click here.

As investors prepare themselves for Verizon Communications Inc. (NYSE:VZ)‘s earnings report, set to be released tomorrow, shares dropped 1.82% today. Analysts expect the company to report earnings of $0.66 per share. Based on today’s drop, it would seem investors felt that may be too high and are selling ahead of tomorrow’s announcement.

Another big loser today, on very little news, was Travelers Companies Inc (NYSE:TRV) , which lost 1.71% of its value. The insurance provider was likely pulled lower along with the other financial related stocks due to the earnings report release from Bank of America Corp (NYSE:BAC), in which the company missed analysts’ expectations on per-share earnings. A number of the financial institutions that hardly relate to Bank of America Corp (NYSE:BAC)’s operations, or even those that do such as JPMorgan Chase but have recently announced their own results, were pulled lower by the whirlpool effect that Bank of America Corp (NYSE:BAC) a caused this morning. To read more about what happened to Bank of America Corp (NYSE:BAC) and JPMorgan today, click here.

The article What Caused the Dow to Drop Today? originally appeared on is written by Matt Thalman.

Fool contributor Matt Thalman and The Motley Fool own shares of Bank of America. Check back Monday through Friday as Matt explains what caused the Dow’s winners and losers of the day and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513.

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