Posted on 10/30/2009 10:48:46 AM PDT by markomalley
Stocks tumbled Friday afternoon, erasing most of the previous session's big gains. Financials and energy shares were among the hardest hit.
The Dow Jones industrial average (INDU) lost 220 points, or 2.2%, with about three hours left in the session. The Dow had lost as much as 225 points earlier.
The S&P 500 (SPX) index fell 25 points, or 2.4%, and the Nasdaq composite (COMP) shed 44 points, or 2.1%.
The selloff was broad based, with all 30 Dow components declining and most stock sectors sliding. Energy prices and stocks were hit hard as the dollar turned mixed; the financial sector erased most of the 4% gain it accrued Thursday.
"I think there was a high level of complacency and confidence about the rally ahead of this week and that's reversed some this week," said Larry Glazer, managing director at Mayflower Advisors.
He said that the firming up of the dollar has played a big role in some of the market's problems this week, too.
Stocks rallied Thursday after a better-than-expected third-quarter GDP report reassured investors that a recovery is on track. The Dow jumped 2% and the S&P 500 soared 2.3%, both posting the biggest one-day percentage jumps in three months. The Nasdaq gained 1.8%.
But Thursday was an exception in an otherwise volatile week that saw positive earnings and economic news mostly treated with indifference. The previously falling dollar also managed to turn higher this week versus other major currencies, pressuring oil and other greenback-traded commodities. That in turn dragged on the underlying commodity stocks.
(Excerpt) Read more at money.cnn.com ...
Or that consumer spending is down enough that you can’t ignore it...
No green shoots for you - Soup Czar Nazi
What traders are looking at is that income and spending continue to decline, while the “growth” in the GDP came almost entirely from borrowed-and-printed government stimulus money, not from organic economic growth.
The dow drops 200, now there’s change you can believe in.
We may slide back into negative growth next quarter. I can see the market head towards 8000 again.
I think we should call that growth, astroturfing....
I subscribe to an investment newsletter that claims that a crash is coming soon, perhaps in the next week. We shall see. I’m certainly ready to buy my ultra short ETFs!
I think it will be at 5k or below by the end of March, unless all that newly printed money hammers the value of the dollar.
I would not be surprised if the market makes anemic attempts to get some of this back but the DOW ultimately drops more than 350 today.
Consumer “confidence” and consumer “spending” sometimes have a bit of a disconnect.
It is Bush’es fault.
That would be an appropriate term for fake green shoots.
Astroturf and timing: Do you suppose the new admin wanted to insure some positive economic news in Nov when they planned to vote for healthcare in Nov? If the GDP numbers are to be believed - this is a staged event.
Sustainable GDP growth for ya..../s
Market saw through yesterday Enron numbers.
Pray for America’s Freedom
So what will Bill say tonight?
Dollar dead cat bounce is big today, hurting all commodities.
I think worse than that when commercial real estate takes a dump. This is where great wealth can be made. Go for stable options and guaranteed funds right now. When the crash hits, buy on sale.
I wonder how many points the White House will claim have been saved?
Correct... Consumer spending is 70% of GDP and was driven by Cash for Clunkers which was nothing more than a pull forward of demand. Wait until holiday spending results come out...
There is a VERY long way to go in this "recovery". Given the depth of the decline, GDP recovery would normally be close to 10% according to historical numbers.
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