Markets continue to plummet today, continuing yesterday’s decline. The Dow Jones Industrial Average has sunk below the 15,000-point mark, down 222 points as of 2:30 p.m. EDT, and with nearly the entire index in the red, there are precious few bright spots on the day for investors. Economic data is fueling today’s drop, but should you be concerned by the Dow’s poor week so far? Let’s get to what you need to know.
Data can’t meet expectations
ADP reported today that private-sector employment picked up by 135,000 jobs in May — that’s 20,000-plus more jobs than were added in April. While that’s indicative of slow and steady growth, analysts had expected more jobs to be added. Productivity increased 0.5%, although that was below the initial 0.7% reading. In all, the economy’s still moving forward and showing signs of progress — but it’s not enough for a fickle Wall Street.
Financial stocks have taken a hit today. Bank of America Corp (NYSE:BAC) shares rank among the Dow’s worst picks, losing 2.5%, while JPMorgan Chase & Co. (NYSE:JPM) has lost 2.1% on the day. Both stocks have a lot riding on the Federal Reserve’s ongoing stimulus campaign, and rumors that quantitative easing could slow in the coming months have made the entire sector jittery. Bond-buying will have to slow eventually, however. It’s an eventuality that Wall Street has yet to accept, particularly as the economy picks up steam.
Still, JPMorgan and Bank of America Corp (NYSE:BAC) are still facing problems of their own related to the 2008 crisis. Bank of America Corp (NYSE:BAC)’s proposed $8.5 billion settlement case with investors over bonds issued by Countrywide Financial recently opened in court, and if investors proceed to trial, it could be a messy affair for the big bank. Meanwhile, JPMorgan agreed to forgive another $840 million in debt today owed by Alabama’s Jefferson County for financing deals that went bad during the crisis. After earlier forgiving more than $720 million in the county, JPMorgan has lost more than $1.5 billion to Alabama alone.
Stocks outside the financial sector aren’t having much of a better time. The Walt Disney Company (NYSE:DIS) shares have shed 1.8% today despite the company’s resounding success at the box office lately. The company’s Iron Man 3 film has reaped more than $1.1 billion in sales worldwide, making it one of The Walt Disney Company (NYSE:DIS)’s most successful movies ever and the fifth-highest-grossing film of all time. With more superhero films to be cranked out by The Walt Disney Company (NYSE:DIS)’s Marvel subsidiary, and new Star Wars films in the works at its recent Lucasfilm acquisition, this entertainment company’s future looks bright at the box office.