Wall Street Having a Worse Day Than Numbers Show
Taking a look at the markets in mid-morning shows some pretty dismal numbers:
- The Dow is down nearly 300 points, or more than 3 percent.
- The S&P 500 is down about 3.6 percent.
- The Nasdaq is down about 3.3 percent.
But inside the New York Stock Exchange, it's an even worse day, if you look at the behind-the-scenes numbers.
If you look at the "Trin" (Trading Index) of trading today -- what percentage of stocks are headed up in value compared to what percentage are headed down -- it's what traders are calling a "90 percent downside day:" 90 percent of all stocks are headed down.
About 320 million shares so far have traded to the downside with only 5 million trading to the upside. On days like that, the Dow is often down more than 600 points.
These days were common in the dark days of late October and November, but one has not been seen since then until today.
To blame: Washington, some traders are saying.
There is too much ambiguity in fiscal policy coming from Washington, they say. First, Treasury wanted to spend the $700 billion government bailout/rescue to buy troubled assets off the balance sheets of big financial firms. Then, Treasury changed its mind and said it wanted to buy directly into the firms. Now, the Fed is saying: Remember those troubled assets? Yeah, we should be buying those.
The result is that no one wants to buy shares of financial firms, such as Goldman Sachs and JPMorgan Chase. And it's why Citi has been in such bad shape and may require more government money in addition to the $45 billion in loans it has already received.
January 14, 2009; 10:55 AM ET
Categories: The Ticker | Tags: Dow Jones, nasdaq, s&p 500
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