The Dow's Whiplash
That cheering sound you may have heard in the distance right now, regardless of where you're sitting, was emanating from the trading floor of the New York Stock Exchange, where the Dow -- after shedding hundreds of points at opening and falling below 8,000 points -- crossed into positive territory.
What a ride. It would be fun to watch, if it wasn't your actual retirement and savings dollars. If you could see your 401(k) in real time, it would look like an accordion.
A lot of brokerage firms have computerized systems that automatically begin purchasing stock indices, such as the Standard and Poor's 500, once stocks begin to fall dramatically. So the bounce back from below 8,000 to the Dow's loss now at about 90 points, may have a lot to do with those automated triggers.
Also, analysts are pointing out that, despite the bad opening, the stock price of the big financial institutions did not drop along with with everything else. In fact, they were still in positive territory earlier this morning. And the financials often are a leading-edge indicator.
Are the markets pushing off the bottom of the pool, headed back to the surface?
Even the CNBC personalities can't agree -- they're bickering on-air.
-- Frank Ahrens
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Posted by: IV | October 10, 2008 10:38 AM
Posted by: IV | October 10, 2008 11:01 AM
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