I am just watching the stock market and trying to figure out if we are in a bear market again (20% drop). If we aren’t there yet, then the downward trend will get us there soon enough. Of course, I was expecting bargain hunters to buy up shares and send the markets reversing. For some reason it hasn’t happened yet.
These are the last 2 week closing numbers. From 12,724 to below 11,000 (depends what we close out today) that is about -1,800 points.
Honestly, the S&P ratings downgrade was widely known to happen so I am not sure why the market is reacting this extreme. It may be the fact the Europe is having similar problems with their economy and debt loads and those situations are very ugly. Some of the countries are having riots because things are so bad.
Market Watch:
“The downgrade of U.S. debt is clearly the catalyst for today’s move, but not the reason. The downgrade simply highlights the United States has problems, which will take time to get resolved,” said Michael Sheldon, chief market strategist at RDM Financial.
Friday’s trade looked as though investors were rotating into defensive sectors, while “today is more about moving to the sidelines and reassessing,” Sheldon added.
Announced Friday night, the S&P decision followed an especially nasty week for equities, heightening the chances of “a very bad initial reaction,” wrote analysts at Barclays Capital in a Monday note.
On Monday, the Dow Jones Industrial Average DJIA -4.14% fell as much as 385 points, and was lately down 313.86 points, or 2.8%, at 11,128.78.
Twenty-nine of the Dow’s 30 components slid, led by Bank of America Corp. BAC -19.34% , down 16%. The New York Times reported American International Group Inc. AIG -10.96% plans to sue Bank of America in a bid to recoup more than $10 billion in losses on mortgage-backed securities.
The Standard & Poor’s 500 Index SPX -5.38% declined 43.66 points, or 2.8%, to 1,155.72, with financial companies hardest hit among its 10 industry groups. The technology-heavy Nasdaq Composite Index COMP -5.58% lapsed 96.32 points, or 3.8%, to 2,436.16.
For every stock rising, nearly 35 fell on the New York Stock Exchange, where nearly 1.1 billion shares traded as of 1 p.m. Eastern.
The U.S. dollar DXY +0.39% gained against most of its currency rivals and U.S. Treasury prices rallied, with yields on the benchmark 10-year note 10_YEAR -8.07% down to 2.364%.
“This country has a debt problem, but it is manageable,” said Kevin Giddis, a fixed-income analyst at Morgan Keegan. “This country has a political division problem, but it is fixable. This country has an economic problem, which can only be fixed with jobs, not government liquidity, and that is the one that worries me the most.”
Gold futures GC1Z +4.17% topped $1,718 an ounce and crude-oil futures CL1U -5.46% dropped $3.48 to $83.40 a barrel on the New York Mercantile Exchange. Read more about gold topping $1.700 level.
Anna Kournikova
Hayden Panettiere
Cameron Diaz
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