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It was only a few days ago I published my commentary regarding an upward move of the stock market. The article in question claimed, "The stock market hit a record high Wednesday as investors cheered the Federal Reserve’s surprise decision to keep its economic stimulus program in place." The article also said that "While the Fed’s decision is positive for the market in the short term..."
Now the very same "NEW YORK (AP)" claims it knows why the stock market has been down since then: Concerns about the strength of the economy and the upcoming budget fight. Who'da thunk that the "short term" positive effect of the Fed's decision would be only a couple of days?
So as you read the below article, keep in mind that the suppositions are totally without merit, that assertions about the improving economy are pipe dreams, and the prognostications of "experts" are about as valuable as your daily astrological forecast. In other words, there is nothing in this article that is worth reading, because next week the AP will publish new suppositions as to why the stock market is down or up, and they will call it news.
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NEW YORK (AP) — Concerns about the strength of the economy and the potential for a budget fight in Washington pushed down the stock market Monday.
The Dow Jones industrial average and the Standard & Poor’s 500 index fell for a third straight day.
Investors initially cheered the Federal Reserve’s decision last Wednesday to keep its huge stimulus program in place. But they’ve since focused on the central bank’s gloomier outlook for growth.
William Dudley, the President of the Fed’s New York Branch said Monday that while the economy was improving, “the headwinds” created by the financial crisis were only easing slowly.
“At first blush (the stimulus) looks positive,” said Kate Warne, an investment strategist at Edward Jones, a financial advisor. “But at second blush, it says conditions weren’t as strong as we were previously thinking. Markets are now responding to that.”
The Dow jumped 147 points last Wednesday to close at an all-time high. But the gain from that rally has been erased. On Monday, the S&P 500 index dropped 8.07 points, or 0.5 percent, to close at 1,701.84. The index was fractionally lower than its level before the Fed’s decision last Wednesday. The Dow fell 49.71 points, or 0.3 percent, to 15,401.38 The Nasdaq composite fell 9.44 points, or 0.3 percent, to 3,765.29.
Financial stocks fell the most among the 10 industrial groups in the S&P 500 index. Investors sold financial stocks on concerns that their earnings would be hurt by lower trading volumes of bonds and foreign currencies.
Citigroup fell $1.64, or 3 percent, to $49.57 after the Financial Times reported that the bank had suffered a “significant decline” in trading revenues that would crimp its earnings.
Goldman Sachs, which began trading on the Dow Monday, also fell. The stock slipped $4.50, or 3 percent, to $165.20.
Utilities were the best performing industry group in the S&P 500 index, as investors sought less risky places to put their money.
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