Markets Now: Did I say 400 Points? I Meant 500
We're keeping a live look on the volatile markets. Here's the latest from Barron's reporters...
2:33 p.m. After some early paring of gains, stocks just keep heading higher. The S&P 500 has rallied 1.8% to 2666.68, while the Dow Jones Industrial Average has jumped 519.60 points, or 2.2%, to 24,710.50. The Nasdaq Composite has climbed 1.9% to 7007.92. It's quite a snap back from last Thursday's selloff, isn't?
As if we'd forgotten, the correction that occurred last week occurred very, very quickly, with the S&P 500 falling 10% in just 10 days. UBS strategist Keith Parker calls that a four-standard deviation event, statistical speak for something very, very rare. Parker counts just 19 similar cases since World War II, with eight of those coming outside a recession. "We see the 4std selloff as fueled by systematic selling from risk parity, risk control and trend following funds, triggered by the rise in portfolio vol/bond-equity correlations and the record surge in the VIX," Parker says. "Market peak [is] not in."
12:19 p.m. Now that's more like it. After giving back more than half their gains earlier, the major market indexes are now back near their highs. The S&P 500 has gained 1.6% to 2660.14 while the Dow Jones Industrial Average has jumped 438.44 points, or 1.8%, to 24,629.34, and the Nasdaq Composite has climbed 1.7% to 6987.84. Even the Russell 2000 has edged into positive territory: It's up 0.6% at 1486.56. The VIX has fallen 9.7% to 26.2.
So is it time to rush back into the market? For long term investors the answer might be no. "While past performance is no guarantee of future results, traders with cash on the sidelines who are considering adding equity exposure might want to consider waiting for two consecutive up market days, combined with strength into the close and a VIX at about 20 or below," writes Schwab's Randy Frederick. "If these things occur, it might be conveying reasonable assurance that the worst of this rout is probably over. We are not there yet."
10:38 a.m. It looks like another volatile day. After trading up nearly 370 points this morning, the Dow Jones Industrial Average has gained 212.25 points, or 0.9%, to 24,403.15. The S&P 500 has risen 0.7% to 2,638.85, while the Nasdaq Composite has advanced 0.7% to 6,923.67. The Russell 2000 has fallen 0.6% to 1,468.42. "Markets haven't hurt fundamentals and that's true on micro and macro levels," writes Rhino Trading's Michael Block. "There's no black and white so grey means adding gradually and keeping buying power and maneuverability intact."
8:00 a.m. How novel. It's Monday morning and futures are pointing to a higher today. The S&P 500 look set to open up 1.2%, while the Dow Jones Industrial Average should open up close to 300 points. The Nasdaq Composite looks set to open up 1.1%. The 1 0-year Treasury continues to grind its way higher --its currently up 0.057 percentage point to 2.88%. "While stocks are getting a respite as it bounced like magic off its 200 day moving average on Friday and now is working off its oversold condition, there is no bounce to bonds at all," writes Bleakley Advisory Group's Peter Boockvar.
So far, at least, that doesn't seem to matter today.
4:38 p.m. A miserable week for the stock market ended on a high note on Friday, as the Dow jumped 330 points, or 1.4%, to end the day at 24,190.9. The S&P 500 rose 38.6 points, or 1.5%, to close at 2619.55. The Nasdaq rose 97 points, or 1.4% to close at 6874.49. Investors flocked to a wide array of sectors, including utilities, tech stocks and financials. The only loser was energy, which fell along with the price of oil.
It could have easily gone the other way. The Dow was off by more than 400 points in midday trading and the index swung by a total of more than 1,000 points during the day.
The indexes were down considerably for the week, with the Dow losing 1,330 points, or 5.2%. It was the largest one-week point decline since October 2008. Clearly, investors are increasingly worried about how a rise in bond yields will impact the Fed and the stock market. The yield on 10-year Treasury notes stayed elevated, though it declined 0.023 percentage points on the week, falling to 2.829%. - Avi Salzman
4:11 p.m. After being down over 400 points at lunchtime, the Dow Jones Industrial Average came roaring back near the close, to finish the day up 1.4%, at 24, 190. The S&P 500 gained 1.5%, to close the day at 2619. That's some great news to take into the weekend. -John Kimelman
3:41 p.m. Maybe this time, gains will stick. The S&P 500 is up 1%. Dow is up 1%. Nasdaq is up 1%. Tech is leading the way. Only one S&P sector is in the red: Energy. -Crystal Kim
3:21 p.m. Get ready for a crazy close. Stocks are blowing hot, then cold, then hot. The S&P 500 is up 0.5%. Dow is up 0.4%. Nasdaq is up 0.5%. -Crystal Kim
3:07 p.m. The Dow was down 27 points in midafternoon trading, to 23,833, after being down by as much as 400 around lunchtime.
But as far as Louise Yamada, a noted technical analyst, is concerned, the major stock indexes could fall further in the coming days before they level out. "They can't go up until they stop going down," she says. "People are in a state of shock and you need to get enthusiasm going before stocks go up."
She points out that both major indexes, despite their recent sell-off, are still well above her support levels.
Yamada says that the support level for the Dow is 22,800, which is more than a 1,000 points below where the index is now. The S&P 500 is also trading above Yamada's support level for the index, which she says is 2500. -John Kimelman
2:14 p.m. Screens are starting to flash green again. The S&P 500 is up 0.3%. Dow is up 0.1%. Nasdaq up 0.2%. Crude is off lows too. -Jack Hough
2:05 p.m. U.S. stocks are off their lows with the Dow Jones Industrial Average down 100, or 0.5%. Other indexes are faring better. The S&P 500 is down 0.2% and the Nasdaq Composite is down 0.3%. Worst group: Energy, down 2.1%. Best group: Utilities, up 0.6%.-Jack Hough
12:45 p.m. With the Dow Jones Industrial Average down more than 300, within hours of opening the day up by almost that amount, an investor tug of war has broken out.
And Jim Paulsen, an investment strategist with The Leuthold Group, thinks he understands why markets are whipsawing. "It reflects the battle investors have going on inside their heads, fear of missing out on a good rally and fear of going even lower," he says. "That is, the human condition of greed versus fear is magnified when you drop 10% in a week."
Paulsen says that the last hour of trading Friday will be telling. "Will it rally big into the close stimulating greed and fear of missing out on a tradable rally," he wonders. "Or will traders just back away not wanting to be long over yet another long weekend setting up another Friday collapse to be followed by a scary Monday."
However it turns out, the market psychology has changed markedly in the past week. -John Kimelman
12:12 p.m. But they did give in. The S&P 500 has fallen 0.9% to 2558.91, while the Dow Jones Industrial Average has tumbled 282.37 points, or 1.2%, to 23,578.09. The Nasdaq Composite has dropped 1.1% to 6700.10. The S&P 500 has found support near its 200-day moving average at 2538.95. If that breaks, ugly might not even begin to describe it.
10:59 a.m. Bulls aren't going to give in that easily. After dropping nearly 200 points, the Dow Jones Industrial Average has advanced 19.97 points, or 0.2%, to 23,880.43. The S&P 500 has gained 0.3% to 2,587.33, and the Nasdaq Composite has risen 0.3% to 6,794.66. Call it a battle royale. - Ben Levisohn
10:50 a.m. And that was what we were worried about. After opening up this morning, stocks have given back their gains. The S&P 500 has fallen 0.3% to 2572.56, while the Dow Jones Industrial Average has dropped 181.62 points, or 0.8%, to 23,678.84. The Nasdaq Composite has declined 0.3% to 6,760.43. It's not that much of a surprise. If you were a trader would you want to spend your weekend wondering what's going to happen to your positions on Monday? Stay tuned. - Ben Levisohn
9:50 a.m. It's still early this morning, but the market is trying to hold onto its gains. The S&P 500 has gained 1.1% to 2609.75, while the Dow Jones Industrial Average has climbed 276.87 points, or 1.2%, to 24,137.33. The Nasdaq Composite has rallied 1.2% to 6859.15. Needless to say, these gains must hold. If the market's rise this morning becomes just another excuse to take profits, the correction could get much, much worse. - Ben Levisohn
7:59 a.m. Stocks are trying to bounce back this morning after officially correcting following the Dow's 1,000-point drop yesterday. Whether they succeed is anyone's guess. While Asia and Europe have dropped, S&P 500 futures imply a rise of 0.1%, while Nasdaq Composite futures imply an advance of 0.2%. Dow Jones Industrial Average futures imply a slight gain. Some small worries have been taken off the table: The U.S. Congress reached a budget deal to reopen the government, for instance. The bigger worry remains what isn't so easily quantified: What markets will look like as monetary policy becomes more normal and bond yields rise. "The environment is transitioning to one of better economic growth but slightly less liquidity as we move past peak monetary support," writes SunTrust's Keith Lerner. "This regime shift is causing heightened investor angst."
That's one word for it. - Ben Levisohn
4:00 p.m. Ouch. The Dow Jones Industrial Average plunged 1032.89 points, or 4.2%, to 23,860.46 today, while the S&P 500 dropped 3.8% to 2581.00, and the Nasdaq Composite has tumbled 3.9% to 6777.16. It's correction time for the Dow and the S&P 500, which have dropped 10.4% and 10.2%, respectively, from their all-time highs. The Nasdaq has fallen 9.7% from its all-time high. -Ben Levisohn
If there's data point to take comfort from, it's that the Dow remains above 23,778.74, the lowest level hit on Tuesday. From a technical perspective, that's important. When I spoke with William O'Neil Chief Investment Strategist Randy Watts this morning, he said that he "wants to see Tuesday's intraday low hold." and it did.
It's a slim hope at this point, but still a hope. - Ben Levisohn
3:48 p.m. Less than 15 minutes left in the day and the market is getting crushed. The Dow Jones Industrial Average has tumbled 811.92 points, or 3.3%, to 24,081.43, while the S&P 500 has dropped 2.9% to 2,603.98, and the Nasdaq Composite has fallen 3% to 6843.36. The Dow is still above 24,000 but only just, and it wouldn't be a shock to see the market make a run at its recent lows in the last minutes of the day. Hold on to your hats. - Ben Levisohn
3:25 p.m. What did I say? No sooner had a published the last update, the Dow made a run at the low of its day. It sill seems to be holding, though. The Dow Jones Industrial Average has dropped 623.57 points, or 2.4%, to 24,269.78, while the S&P 500 has fallen 2.1% to 2624.85, and the Nasdaq Composite is off 2.2% at 6897.62. Just 25 minutes to go. - Ben Levisohn
2:48 p.m. We're heading into the last hour and change of the trading, and the market is trying to stay off its lows. The S&P 500 has fallen 1.9% to 2631.37, while the Dow Jones Industrial Average has dropped 557.87 points, or 2.2%, to 24,335.48. The Nasdaq Composite has slumped 2% to 6909.29. The Dow had been down as much as 681 points, and it would be nice to see it close off those lows. Of course, now that I've written that, don't be surprised to see the selloff reaccelerate. - Ben Levisohn
1:21 p.m. Dudley made the market drop. Can JPMorgan's Marko Kolanovic bring it back? He just sent out a note reminding investors that the "current selloff is entirely technical in nature, that fundamentals did not change, and as such that we believe that it is an opportunity for human investors with some tolerance for market volatility to step in." In the piece, he notes that while equity volatility is higher--the VIX has climbed 17% to 32.52 this afternoon--volatility in currencies, the 10-year yield, and high yield bonds hasn't increased nearly as much. "Equity volatility will not go down back to the lows near-term (e.g. VIX of 10), he writes. "But we expect it to decline from current levels." And the market is snapping back: The Dow Jones Industrial Average has dropped 515.96 points, or 2.1%, to 24,377.39, while the S&P 500 has fallen 1.6% to 2,639.71, and the Nasdaq Composite is off 1.7% at 6,929.99. - Ben Levisohn
12:52 p.m. Well, it got worse, didn't it? The Dow Jones Industrial Average has tumbled 620.38 points, or 2.5%, to 24,272.97, while the S&P 500 has dropped 2.2% to 2,622.03, and the Nasdaq Composite has slumped 2.5% to 6,873.75. The selloff appeared to pick up steam when Federal Reserve Bank of New York President William Dudley called the downdraft " small potatoes." And for investors who had been hoping for the Fed to say something to support the markets that had to be disappointing. "Sounds like the Fed "PUT" is dead for now," says NatAlliance's' Andrew Brenner. "Will the markets challenge this?" - Ben Levisohn
11:28 a.m.Dow Tumbles As Yield Scare Resumes After a modest drop at the open, the Dow Jones Industrial Average has fallen sharply. The blue-chip benchmark has dropped 418.32 points, or 1.7%, to 24,475.03 at 11:26 a.m. today, while the S&P 500 has fallen 1.5%, to 2642.29 and The Nasdaq Composite is off 1.7% at 6930.91. The S&P 500 and the Dow are now down for the year. - Andrew Bary
9:27 a.m.Teva Tumbles, Twitter Soars as Market Seeks Direction Stocks look set for a slightly higher open this morning even as the 10-year Treasury yield continued to tick higher following a stronger-than-expected jobless-claims report. Congress is still working to complete a budget deal that will get a vote in the Senate today. S&P 500 futures imply an advance of 0.1%, while Dow Jones Industrial Average futures suggest a relatively unchanged open. Nasdaq Composite futures imply a gained 0.3% at the open. The 10-year Treasury year has ticked up 0.043 percentage point to 2.875%. - Ben Levisohn
10:32 p.m.What Broke the Market…and What Comes Next On Jan. 26, the stock market was sitting at an all-time high. Investors everywhere were marveling at what an impressive start to the year it had been-and what an astounding run stocks have had for the past nine years, adding more than 300% from their 2009 post-financial-crisis low. And, then, things suddenly fell apart. - Ben Levisohn
8:20 p.m.Now What? The Market Battles for a Narrative After two days of fear, followed by a one-day rebound, the market was less sure of its direction today. The Dow Jones Industrial Average held onto positive territory for most of the day - up as much as 350 points this morning - before closing down 19 points. The market has become a battle for narratives : inflation/higher wages versus solid economic growth. At some point, investors will sort this out. But until then get used to the bumpy ride. - Alex Eule
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.