Sure, the stock market slumped today, dropping the Dow Jones industrials nearly 122 points, and the Nasdaq Composite down 31 points.
There was trader talk that today’s sell-off, coming on the heels of Friday’s sell-off, was setting U.S. stocks, anyway, for an oversold rally. Indeed, some analysts said investors who wanted to cash in profits were using the news as an excuse.
Jerry Castellini of CastleArk Management thinks the first correction of 2004 is largely done. The Nasdaq is down 12.7% from its peak in January. The Nasdaq 100 is down 12.5%. The Dow is down 6.7% from its February peak.
Agreeing with Castellini, a number analysts and money managers offered three reasons for believing a bottom is near, at least for now:
Advancers to decliners. The ratio was 10 to 1 on the New York Stock Exchange today. That’s an amazing differential, noted CNBC’s Bob Pisani. But a number of technical analysts said that’s a typical reaction before a bottom.
The economic fundamentals remain strong. Housing remains strong. Consumer spending is solid. And interest rates are low. “We don’t think terrorism events like what we saw this weekend will be enough of a reason for consumers to stop spending,” said A.G. Edwards’ Scott Wren.
Earnings season is coming. There were only a few earnings reports today and no economic reports. Today’s selloff was precipitated by the Israeli assassination of Ahmen Yassin, the founder of Hamas, and turmoil in Taiwan. When earnings reports start to come in next month, investors will start to look at the better news, said Prudential Securities’ Ed Yardeni. And, he said, earnings will be strong and “should help to revive the market pretty nicely.”
What investors have to do to make money in today’s market is to make careful stock selections, remembering that stocks do not all move up or down at the same time. Materials may be leading the market for a while, said money manager John Bollinger.
If you wanted safety, bond prices went up. So did prices of precious metals, including gold, silver and palladium. Gold closed at $417.60 an ounce, up $4.90 from Friday. The dollar fell against major currencies.
There was trader talk that today’s sell-off, coming on the heels of Friday’s sell-off, was setting U.S. stocks, anyway, for an oversold rally. Indeed, some analysts said investors who wanted to cash in profits were using the news as an excuse.
Jerry Castellini of CastleArk Management thinks the first correction of 2004 is largely done. The Nasdaq is down 12.7% from its peak in January. The Nasdaq 100 is down 12.5%. The Dow is down 6.7% from its February peak.
Agreeing with Castellini, a number analysts and money managers offered three reasons for believing a bottom is near, at least for now:
Advancers to decliners. The ratio was 10 to 1 on the New York Stock Exchange today. That’s an amazing differential, noted CNBC’s Bob Pisani. But a number of technical analysts said that’s a typical reaction before a bottom.
The economic fundamentals remain strong. Housing remains strong. Consumer spending is solid. And interest rates are low. “We don’t think terrorism events like what we saw this weekend will be enough of a reason for consumers to stop spending,” said A.G. Edwards’ Scott Wren.
Earnings season is coming. There were only a few earnings reports today and no economic reports. Today’s selloff was precipitated by the Israeli assassination of Ahmen Yassin, the founder of Hamas, and turmoil in Taiwan. When earnings reports start to come in next month, investors will start to look at the better news, said Prudential Securities’ Ed Yardeni. And, he said, earnings will be strong and “should help to revive the market pretty nicely.”
What investors have to do to make money in today’s market is to make careful stock selections, remembering that stocks do not all move up or down at the same time. Materials may be leading the market for a while, said money manager John Bollinger.
If you wanted safety, bond prices went up. So did prices of precious metals, including gold, silver and palladium. Gold closed at $417.60 an ounce, up $4.90 from Friday. The dollar fell against major currencies.
