We're keeping a semi-live look on the volatile markets. Here's the latest from Barron's reporters...
3:13 p.m. The Dow Jones Industrial Average has rallied back from its earlier losses and is near its high of the day. It's dropped 90.20 points, or 0.4%, to 24,793.92, while the S&P 500 has dipped 0.1% to 2724.29. The Nasdaq Composite has advanced 0.2% to 7388.23, while the Russell 2000 has gained 1.5% to 1570.42.
Yes, the Dow Jones Industrial Average is still down 100 points or so on the day, but these days that's a fraction of a percent. While we could argue that its all just noise right now and better turned out, the fact that the bears have tried twice to send stocks tumbling only to be rebuffed has to be a good sign. A better one would be a rally that sees both the S&P 500 and the Dow join the Nasdaq and Russell 2000 in the green.
We'll find out at 4pm. - Ben Levisohn
12:13 p.m. That didn't last long. Selling pressure picked up, and the Dow Jones Industrial Average slid 330.51 points, or 1.3%, to 24,553.61. The other indexes haven't fared quite as badly. The S&P 500 has dropped 1% to 2701.92, while the Nasdaq Composite has fallen 0.7% to 7321.13. The small-company Russell 2000 has ticked up 0.2% to 1564.75.
Yes, we can blame Gary Cohn's resignation. But the bigger problem, says Brad McMillan, chief investment officer for Commonwealth Financial Network, is that the "from an economic and market standpoint, the news is about as good as it can get." Business and consumer confidence are high, interest rates are rising, the economy may be at full economy, you name it. Throw on top of that Cohn's sudden resignation--and the tariffs it signals--and you might have a problem. "[The] sudden announcement of tariffs-coupled with the resignation of a senior official-is a shock," McMillan explains. "By making sudden changes in the status quo, markets could be forced to adjust quickly, which tends to be much sharper."
Is this sharp enough for you? - Ben Levisohn
10:34 a.m. Well, that's not so bad. Dow Jones Industrial Average futures had been pointing to a 300-point drop, but its current decline is about half that--the blue-chip benchmark has fallen 148.73 points, or 0.6%, to 24,735.39.
But the Dow isn't the market--with just 30 stocks, how could it be?--and the other indexes are doing much better. The S&P 500 has declined fallen 0.4% to 2716.63, while the tech-heavy Nasdaq Composite has dipped just 0.1% to 7361.68. And would you believe that the small-company Russell 2000 is up 0.1% at 1,563.46?
In a note released earlier this week, the Institutional View's Andrew Addison noted that the Russell 2000 relative to the S&P 500 has tested support three times and three times its held. "This is encouraging, but we'll need to see further improvement to confirm that the major trend has changed upward," he writes. "Might the imposition of tariffs finally bring the Small-Caps into the spot-light?" - Ben Levisohn
6:54 a.m. We knew the markets were going to open down this morning, but it's still not easy to wake up and see the futures getting crushed following Gary Cohn's resignation. S&P 500 futures have dropped 1%, while Dow Jones Industrial Average futures have slumped 310 points, or 1.3%. The Nasdaq Composite has fallen 0.9%.
What's strange is that the S&P 500 traded in a 7.7 point range yesterday, the tightest since January, according to Jones Trading's Michael O'Rourke. Oh, if only that calm could have persisted. Instead, Cohn resigned, and O'Rourke contends that his departure could be a bigger deal than the tariffs themselves. "Cohn is generally considered the President's most credible and capable advisor," O'Rourke says. "Up until this point, Cohn's business and economic expertise has been a driving force in the Administration's push to enact business friendly economic policy, the highest profile of which has been the corporate tax cuts."
Remember, markets hate uncertainty. And right now, that's just about all we have. - Ben Levisohn
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.
