Stocks pretty much took it on the chin today, and the tech sector did not escape "black eye Friday" as traders sold into the weekend, not wanting to hold assets over the 2 day recess with the turmoil in the Middle East escalating by the day. Day-traders hate this, and many other shorter term traders and investors simply do not wish to retain the risk associated with holding for a trubulent 48 hours when anything could happen, and you cannot respond until Monday morning, when everyone else is too.
The Dow was off a whopping 366 points (or about 2.6% of its gross value), while the tech-heavy Nasdaq plunged a serious 77 points for nearly exactly the same loss as the Dow per capita. The AP summary blames recession fears and a few other overlapping concerns thus:
"Stocks pulled back sharply and bonds jumped Friday as lackluster profit reports and rising oil prices stirred concerns about the ability of the economy to continue to push ahead."
Meanwhile, oil took a break from its recent spate of repeated new record highs, dropping from an unbelievable $90/ barrel. The upward surge of black gold may also play a significant role in maintaining the downward pressure on stocks as the (moderately panicky) selloff unfolds over the next week.
In truth, it is far more likely that Middle East fears played a more crucial role on the weekend sell load, as profit-takers gained the additional incentive to sell with a risk-averse impulse to lighten shares over the weekend. This is fairly typical on wall street jitters Fridays.
"The television made me do it," sounds a bit simplistic, but traders are notorious newswatchers and CNBC by itself can even move markets a little now and again.
Weekend news in the Middle East should dictate the direction of Monday morning's open, and set the pace for the week to come. With lackluster earnings reports recently under our belt, my guess is that we can expect a downward correction -- much milder I hope -- to continue over the next few days until buyers consolidate their bargain prices and re-enter the markets.
This assumes the Middle east does not come unhinged (a safe assumption?) any time soon.
Read up a little on staggering crude realities?
http://biz.yahoo.com/ap/071019/oil_prices.html
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment