The market plunges and these 3 blue-chips start to look appealing

The S&P/ASX 200 (INDEXASX: XJO) finished Wednesday down 0.9% following hefty falls on US markets overnight which sliced 1.6% and 1.5% off the Dow Jones and the S&P 500 respectively.

The speed of the recent correction – which has seen the index lose around 8% since hitting a 52-week high back in early September – has come as a shock to many investors.

While the index falls provide a view of the overall market they don’t show what is going on at a stock specific level. For example, leading blue-chip health care company CSL Limited (ASX: CSL) has significantly outperformed the wider market; its share price has lost just 1.2% since the beginning of September.

Some stocks however have fallen by as much and in some cases more than the index – in many cases nothing has changed in terms of the long-term earnings potential of these companies, rather the only change has been their share prices.

Woolworths Limited (ASX: WOW) is a world class retailer which has recorded a fall of 6.5% since the beginning of September. While some investors remain concerned over the mounting losses within the newly formed hardware division, whether it is the defensive attributes or the growth avenues, the opportunity to buy this top business at a lower price shouldn’t be dismissed.

Origin Energy Ltd (ASX: ORG) is down 5.3% since 1 September. This has wiped out all of the stock’s gains over the past 12-months – the share price is now just 4% higher than it was one year ago. The flattish result is despite the group progressing towards the production stage of its massive LNG project which should result in a major increase in cash flows to shareholders in coming years.

Leading financial services powerhouse AMP Limited (ASX: AMP) has slid 9.7% since September began. The group’s leverage to equity markets can at least partly explain the falls, however like the other blue-chip companies listed above, AMP’s long-term outlook has not altered.

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Motley Fool contributor Tim McArthur owns shares in Origin Energy Ltd.

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