Stock Market At Its Most Volatile Since 2002

Dow Jones Industrial Average dropped more than 300 points by mid-day as worldwide financial markets worry about the U.S. credit market. The Dow Jones, as well as the Standard & Poor's 500 and Nasdaq, have lost 10% since July, and a strategist at Absolute Strategy Research tells the Times, "The psychology is shifting notably today. When a market drops by 10 percent, people start to feel it in their portfolios. People are used to stock markets behaving in a non-volatile and even bullish manner.” Trading curbs were even put in place at the NYSE.

Speaking of volatile, the Chicago Board Options Exchange Volatility Index says this is the most volatile period since October 2002. The Federal Reserve injected $17 billion into the system this morning, but, the Wall Street Journal reports, "momentum faded quickly amid the specter of global economic problems." Also, mortgage lender Countrywide tapped its entire $11.5 billion line of credit. This is probably why you haven't seen your friends, neighbors or commuters who work in the finance industry very much lately!

Two quotes from the Wall Street Journal:

"Everything is eroding, and people are just selling and taking profits where they can. Maybe there's some panic selling as well," said Stephen Carl, head trader at Williams Capital. "People have taken money off the table."

"I think we're at a critical level, and it's important that the market holds here," said Ted Weisberg, floor trader at Seaport Securities. "If it trades below this, you're going to start to get rhetoric that we're in a bear market."

Panic AND rhetoric in the midst. And if you're trying to get a loan for a mortgage these days, good luck - even with good salaries and great credit, you may be screwed.

Update: Thanks to an end-of-the-day rally, the stock market erased most of its losses. From Bloomberg: "The S&P 500 advanced 4.57, or 0.3 percent, to 1,411.27. The Dow average lost 15.69, or 0.1 percent, to 12,845.78 after earlier falling 344 points. The Nasdaq Composite Index slipped 7.76, or 0.3 percent, to 2,451.07."

Photograph of New York Stock Exchange traders by Richard Drew/AP

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By Jen Chung in News on August 16, 2007 2:14 PM

Comments [rss]

Reflect

thats a picture of racial equality!

guest

#8 That could have been typed by me! hehe

guest

Well, this should certainly help the Democratic cause, no..?

guest

With foreclosures going through the roof and market tanking, at least we don't see people jumping off the bridge..

guest

I hope this results in my meager IRA regaining the $3k it lost last week. Crap.

pik

i too hope that this results in more affordable housing.

guest

... and America keeps on spending.

Roger McDowell

Quick someone tell the tourist downtown to rub the bulls balls a little harder!

guest

But the dollar rallied against that pesky Euro. And the Yen rallied. Oh well, missed the oppotunity to see Tokyo again on the cheap(er).

guest

The most galling thing today was that the banks led the way back. They're the asshats that got us into this mess.

guest

Darn, that's the end.

guest

"The federal reserve injected $17 billion of liquidity into the banking system today and it still hasn't stopped falling. Not good. Please, someone tell me that they are better off now then they were 8 years ago.

[10] Posted by: Reality Czech | August 16, 2007 3:12 PM "

Far better-they are currently regaining what was lost earlier today. The Dow is up ten now and more of own homes now then 8 years ago.

emilydickinson

I just saw a guy in a Lanvin suit selling pencils and apples in front of the stock exchange.

zodak

the #1 threat facing america? BEARS!

guest

A "bear market" sounds frightening.

Stephen Colbert's Number One threat on the Threatdown? Bears!

guest

A "bear market" sounds frightening.

guest

Tiki barber our next mayor.

matty

also, i blame the midwest and new york should be a city state and i am going to go party on the bench right now.

JMH

[4] wrote:
i want to live in a barter economy
For some reason I misread this as a "barber economy." Imagine, an entire economy based around Tiki Barber! (Actually, that's probably coming sooner or later.)

guest

I too, hope the outcome would be more affordable housing. isn't the game rigged if the computer shuts the game when the market drops or if it senses over activity? I say strap yourself in, it's going to be a bumpy ride.