More Reaction to Dow’s Triple-Digit Dip
Watching in alarm as the Dow Jones Industrial Average plummeted more than 200 points yesterday, investors’ uncertainties concerning basic economic problems, the ongoing subprime market issues as well as the volatile nature inherent in equities are playing out before their eyes.
"The market is very, very sensitive at this point, and any news about a potential financial problems is going to affect the way that the market trades," said Scott Fullman, director of investment strategy for I.A. Englander & Co. "We've been seeing extreme sensitivity in the financials, but also in the consumer stocks and industrials during the session."
The nearly 208-point decline in the Dow Jones Industrial Average puts it ahead only 4.54 percent for the year. Meanwhile, at 0.58 percent the S&P 500 has lost almost all the gains it has seen over the year, and the Nasdaq composite is up 3.47 percent.
“There is still a tremendous amount of risk out there,” said Mike Malone, a trading analyst at Cowen & Co. Malone calls the efforts by central banks to stabilize the markets somewhat successful. Yesterday the European Central Bank deposited another $10.5 billion into money markets, reporting that conditions were bouncing back to normal after several days of volatility.
There was no action yesterday by the U.S. Federal Reserve Bank, yet the Fed said it stands ready to act again should market conditions warrant. The bank has pumped approximately $64 billion of liquidity into the U.S. banking system in the past week.
Published on August 15, 2007
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