 | MONEY
|
| HOME | PRICE GUIDE | BUSINESS | SPORTS | OPINION | SPECIALS | STORE | ARCHIVES | CONTACT |
|
|
Easy Come, Easy Go - Money Matters for 10/20/05 Don Bravo | 10/20/05
Just as yesterday's sizable gains were almost completely unexpected, so today's spectacular declines. The Dow gave back more than it gained the day before, and is down a handful of points for the week, while the Nasdaq held onto some of its gains. What's troubling is the tumbling NYSE, the largest composite index in the United States.
The NYSE tumbled nearly 129 points on Thursday, close to a 2% decline. 100+ point declines on the NYSE should not be taken lightly and this one is particularly troubling, coming, as it is, on the heels of a very positive day for the markets and smack in the middle of the earnings season.
It will be all hands on deck as the markets close up trading for the week, but investors are either confused or with a very short leash on investments. Profit taking and some options arbitrage surely played a role in today's action, but more than anything else, concerns over the future weighed heavily.
The most positive news of the day was another drop in the price of oil. A barrel of light, sweet crude fell another $1.49, to end the day at $60.02. At the same time, as mentioned here at length last week, the inverse movement of interest rates was also in play. The benchmark 10-year treasury rose in yield from 4.44% to 4.48%, and that is what has investors spooked.
Rising interest rates usually contribute to slower overall growth in the economy, and the Fed, in their ongoing efforts (whether they are actually effective is another matter) to contain or derail inflation, have shown no signs of slowing down their continued 1/4% increase every time the FOMC meets.
While there is a growing feeling that the Fed is merely raising rates because they have to in order to give themselves some maneuverability, their insistence has investors grumbling.
Tomorrow being options expiration day, the conventional wisdom is for a good deal of volatility. However, after the frenetic action so far this week, it seems a safe bet that whatever way the market goes on Friday, it will follow on Monday.
This market has still not made up its mind as to direction, though there may at last have emerged a leading sector - technology, which fell less than others today. The Nasdaq continues to be the best place to find mid-cap bargains, though thy may be cheaper early next year.
Dow Jones: -133.03; 10,281.10 close
NYSE Advancers: 826
Nasdaq Advancers: 947
NYSE New Highs: 45
Nasdaq New Highs: 59
Gold: -2.60; 463.20 close
|
|
