Hate to say I told you so, but when everyone was shouting "happy days are here again" after Tuesday's huge 416-point gain, I warned readers that the market's psychology remained fragile. Just like in a person with bipolar disorder, the market's stratospheric highs never last and often lead to crushing lows. Today is a case in point.First the market plunged. There are so many unfavorable bits of news contributing to the sell-off that it was hard to single one out. Financial stocks including Bear Stearns Cos. (NYSE: BSC) were under pressure following the $12.6 billion collapse of the Carlye Fund. American International Group Inc. (NYSE: AIG) fell to a 9-year low after Morgan Stanley predicted wider losses on credit default swaps, according to Bloomberg News.
A Commerce Department report showing that retail sales fell 0.6% last month sent shares of that sector including Wal-Mart Stores Inc. (NYSE: WMT), Target Corp. (NYSE: TGT) and J.C. Penney Co. (NYSE: JCP) tumbling. Even big-cap tech names such as Google Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) were down. Safe havens were few.
By noon, the picture looked less bleak after Standard & Poor's said the end of writedowns for financial institutions was "in sight." The market then headed back into positive territory, as investors bet that if S&P couldn't see the start of the subprime mortgage meltdown maybe the ratings agency would be able to figure out when it would end. Meanwhile, gold continued to soar and the dollar continued to slump, indicating further unease among investors.
Wild days like this have become the norm, which is good reason for investors to remain cautious.
Tell-tale stat: Manhattan apartment sales decline for 4th straight quarter
Closing Bell: Stocks gain despite FOMC depression description; AAPL, GE, LOGI, WFC
TVGuide.com, channel unsold, resold for $45 million less
Reader Comments (Page 1 of 1)
3-13-2008 @ 11:14PM
mitch said...
the knockout is coming. the feds will bury us yet.
3-17-2008 @ 3:38AM
Christopher Lyons said...
Christopher D Lyons Independent Researcher. tiptopwebsite.com/netspendreferral4216823698