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Dow Jones Down Over 300 Points
A week ago we saw the Dow Jones close at it’s record high over 14,000 and many analysts hearlded the beginning of a new Bull Market. Today, Wall street was stunned by a selloff that caused the market to plunge back even further below last weeks highs and has analysts talking about the possible emergence of a Bear Market.
The Dow Jones industrials closed down more than 310 points after earlier dropping nearly 450 points today marking one of Wall Street’s biggest losses of 2007. Fueling the downward spiral were concerns that higher corporate borrowing costs will stifle the rapid pace of takeovers that had driven stocks higher throughout this year. Investors also felt the bite from sluggish home sales and a continuing rise in the number of subprime loans that went into default in recent months. The Commerce Department released yet another disappointing report on home sales and corporate borrowers feeling the eniornment not suitable decided to sell off to ease the discomfort cauesd by subprime mortgage problems.
The rollercoaster ride for investors this year has many people wondering how their retirement and personal investments will weather the storm. While stocks plummeted, savvy investors poured their funds into the safe haven of the bond market. however, the soaring price of T-Bills has lowered yields resulting in the 10-year plunging from 4.90 percent on Wednesday to 4.79 percent on Thursday. Admist numerous report that the US economy is on track, many investors are growing weary of the volatility this year has seen.
It is worthy to note that sharp declines in the indicies such as seen today are usually followed by rallies in the markets but the overall effect for the common investors who have their 401K’s in Mutual Funds will be felt far longer than for the broker/dealers. To most of the common investors out there, a day like today will likely take months to recover losses in one’s portfolio.
by mishas
so bad for poor peoples
by mary
The Dow Jones fluctuations make one wonder how much of a predictor it is of the economy! It will be interesting to see what happens next!
by Brian Rathjen
maybe i should think twice before getting stock from DOW
by Dollars Blog
The Down Jones industrial average is overinflated.
by syedwasi87
The DJIA is also part of the recent drop in world wide stock markets, even the middle east recently has felt quite a downfall, almost all the local Indexes of the stock markets here dropped almost a few hundred point on a year to date basis.
by Walter Victor
This affects me as I am one of those people who have their 401k in Mutual Funds and this will be felt far longer. Just a sad turn of events for me and many other investors alike.
by C4G
Actually it is over-inflated. Any experienced trader (or former broker / dealer such as myself) who has been around the market for 10+ years knows that when the market surges into a momentary “Bull Market” like it did when it topped 14,000, it’s a brokers wet dream because they know it’s time to exercise “put” options and clean up from all the losses that will happen as the hype settles down. Most newbie investors see a surging market as a time to buy, but in reality they’re just feeding the options traders.
If you don’t know what an option is, here’s a Wiki on it that explains it in laymans terms…
http://en.wikipedia.org/wiki/Put_option
Anybody playing “put” options on GOOGLE (GOOG)? I know several dealers who are calling GOOG to drop as low as 450 per share within the next quarter.
by Bodybuilding Web
I don’t know why people care so much about a 1% drop here or there. Unless your the down jones were to drop to 5000 and your life savings was relying on it, it’s all nickels and dimes in the end.
by Bodybuilding Web
Unless you have your life savings and the down jones crashes to 5000(unlikely) its all nickels and dimes really in the end, (and eventually would go back up given enough time).
by Jakob Dupont Knudsen
Well the stock market sure is crazy in these days. I agree with mary. It’s interesting to see what happens next.
by San Francisco Giants Blog
You give some good insight that a lot of stock sites won’t talk about. Thanks for the unique perspective.
by C4G
@Walter Victor, yeah, I know the feeling, if you have your money in a 401K or a mutual funds it seems like it takes forever to rebound from losses like this. It always seems the losses are easier to come by than the gains, but still a 401K is a great thing to have and highly recommended. I’m actually NASD 7 and 63 licensed because when I was working as a programmer for IBM one of my contracts at Raymond James required I get licensed to work on the back office stuff. After that, a broker dealer firm snagged me to research on their Bloomberg terminal and I learned a lot of the shadiness that really goes on behind the scenes of the big brokerage firms. Martha Stewart’s bust was a laughable offense compared to some of the stuff I’ve seen with firms working together to “pump and dump”…
by AAA Forums
Investing in these areas can be difficult indeed. One wonders where we all end up when it comes to the time of using our little nest eggs for retirement.
Sometimes, a few dollars is all it takes for a retired couple to start rolling downhill and never recovering. One hopes they know how to budget effectively.
by Matthew Smith
Great read, shame most of the so called financial experts don’t report it like it is.
by Trevor DeRiza
I’m in much the same boat as Walter up there, and I can say it’s not very fun to be on when it’s sinking.
The thing I always find interesting about these situations (and any news, really) is that when things go bad, it’s always talked about a lot more than when it goes well. I guess scary/bad news sells more (although it’s not helping my health!)
by David K
I agree with Bodybuilding Web. A drop of 1% is not going to affect real investors who are in it for the long term as they know that the stock market will fluctuate here and there. In the end, the stock market will usually go up.
http://www.drett.com
by Finance Loans
Timing is always the key factor. Rapid rises are often followed by corrections. It looks likes this bull run has more legs.
At some point, and it cannot be far off, we will be entering a bear market.
by Irfan
It’s bad time for the investors at the moment. Economy all over the world is slowing down. Same thing is happening here in UK. I am investors my self in housing market so will just have to ride this out
by Martin
Stocks markets are a tricky business. All happens so quickly…
by Offshore Company Formations
Excellent reading. Looks like there are some worrying times ahead for investors, though as long as they are in it for the long-term any drops will be compensated for. Just don’t let any short-term fluctuations panic you.
by John
Nows the time to buy stock. The market will eventually return to a normal state, so buy while they’re cheap.
by C4G
Even for the average and honest broker /dealers these type of hits really sting. From my experience the majority of brokers who profit heavily have no ethics. An example, an unnamed firm I worked for doing research was underwriting several dotcom companies in the late 90’s and they had partnered with two other underwriting firms and they loaded up on the stocks of companies the other was underwriting through reverse IPOs . Then they had their floor dealers making calls to retired people (from info they bought from a company who was leasing Expreian data), pushing the other firms offerings at $7 per share (claiming it was a steal), well, that company bottomed out and one particular retired gentleman lost over $70K in less than two weeks, but the brokerage firms made a killing….
Needless to say, I left the firm because the CEO and CFO were sniffing the profits up their noses and spending tons of money courting strippers and partying as they’d lost sense of ethic. Alas, that firm bottomed out and the CEO was arrsted on posession of cocaine charges and the CFO wrapped his 3 day old Dodge Viper around a tree. I guess Karma does come back to haunt you when you target elderly retired people and snatch their nest eggs for nose candy and over priced tricks.
Actually in my experiences, the vast majority of dealers are typical jockohomo (to quote the DEVO song) ex-high school football players who have no morales or ethics. For me, I could *never* play some retired teacher or civil servant for their pension and life savings. That’s why I got out. Luckily today anybody can open a ScottTrade or Etrade account and manage theirown portfolios without the fever pitch from a broker /dealer.
by Angel
People are certainly very worried about this in Thailand I can tell you. Nobody round here wants another 1997.
by bjrsilva
After a few years (10 or so) being a stock market trader, I’m kind of used to these market fluctuations.
http://www.undebited.com
It’s kind of weird that people still get worried and don’t sleep over a 300 points fall. What if you are on the right side of the market? What if you are short enough to profit from this fall? Nah, you ain’t gonna be bankrupt. Trust me.
by Stock Trading
This really emphasizes the importance of proper money management. Even though the market is in constant motion there are always opportunities. However you play the game be careful managing your money.
by Tibi Puiu
Wasn’t Dow Jones the company that bought business.com for 350 million $ ? Sucks to be them, lost a lot of money here
by Wrestling
A new study by Moody’s Economy.com predicts that mortgage credit quality will weaken substantially well into 2008, with 2.5 million first mortgage loans expected to default over the next two years, particularly in California, Florida, Las Vegas, Phoenix, Washington and New York!
by SFbay
Some people feel that the drop is also related to worries about credit and a potential for higher oil prices in the near future.
The stock market often reacts to worries or other events with one day swings. Overall, though, it’s no real indicator of how the economy is going.
by Eddie Jack
The Dow Jones dropping 300 points was a very significant event. One expert from Charles Schwab says “I think people are really cautious right now. We’re seeing the convergence of a whole host of sort of unrelated or only slightly related issues.” He contends market volatility will remain as investors sort through issues such as the availability of credit for corporate buyouts, soured subprime mortgages and rising energy prices. Hang in there all you big shareholders…it’ll turn around.
by Amanda M. Gladden
This shouldn’t come as a surprise to anyone after the run-up the DJIA saw very recently, there was bound to be a sell-off.
by Alex
The drop in DOW Jones was followed a surge yesterday. And then today it surged again, but then went down again. It is truly one heck of a roller coaster.
by El Husseiny
This is what happened all over the world, but Dow Jones still has the most effects on the world
http://shanecash.blogspot.com/
by JT Culture
People could make a lot of profit from this drop in the stock market!! Its bound to go back up sooner or later - just have to keep your head up!!
by DreamsOfWealth
It took another big hit today too. Just dropped pretty bad with the Dow is now sitting at 13,211.99 and down 146.32 points again today. That’s almost 800 points drop since that surge that sent the Dow over 14000.
some analysts are saying its a buyers market rightnow but I’m not so sure. I think this market is over inflated and it’s only going to get worse.
by Steve
An alarming drop to say the least. Still the resilience of the stock market has proven itself many times…
by Funny Stuff
The stock market moves in cycles. Considering how overinflated it is now, its just a matter of time before it crashes, and crashes big.
by janar kaas
Very alarming drop indeed, lost a bit myself too. Let’s just hope it doesn’t get worse.
by Home Business Opportunity
The market is often weak at this time of the year. You would have made good money buying into historical weakness, this time will be no different. Buy the broad market on a weakness has alway been a good strategy.
by Forex Blog
It is not so big problem that DJ is down over 300 points. It is good for the bulls, maybe in a month it will be up.
by baseball collectibles
I heard someone on the news the other day say that we are headed for possibly somethinga s big as the great depression, due to the large amount of debt we have.
by spanish golf
I have been studying the stock market for fun for some time now, but the Dow Jones does just seem to be unpredictable (for me at least)
Thanks for telling it like is is though!
by Social News
Looks like another 300+ down day for the US markets
by Dannielle
It looks like the market is sagging in this new year
by Jon
2008 should be an interesting year, will it crash or recover, that seems to be the big question.