Dow Plunges 140 Points On Economic Fears (DJIA, BAC, WFC, JPM, SPX, HPQ)

The Dow Jones Industrial Average (DJIA) today plunged 140 points, or 1.39%, to 10,009 as investors remained cautious ahead of key economic reports this week. Bank of America BAC led the Dow lower, declining 2.69% to a fresh 52-week low. Shares closed at $12.32. Wells Fargo WFC declined 3% while JP Morgan JPM tumbled almost 2%. Many analysts have begun to point out the S&P 500 (SPX) now trades at 10.9 times earnings estimates for 2011. This price/earnings ratio is roughly 25% lower than the market's historical average of 15 times earnings. Hewlett-Packard HPQ rose 1.4% after it announced its board approved an additional stock buyback of $10 billion. Investors, particularly retail ones, seem to be shunning equities and running for safe haven government bonds. Ten years ago we had irrational exuberance. Now, we may be experiencing irrational pessimism.