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Author	Topic: Today's Market
InvestorGuide Daily Administrator	posted 04-05-2000 06:16 PM The stock market calmed down today and technology stocks moved up, helped by President Clinton's observation that the U.S. is undergoing "an economic transformation as profound as the one that led us into the industrial revolution." Though the Nasdaq was up modestly on the day, it was well off its highs and the Dow dropped 130 points. (source: Washington Post) http://washingtonpost.com/wp-dyn/articles/A18166-2000Apr5.html
MaxPower	posted 04-05-2000 02:17 PM mojo and JHirsch - my idea is based on theory (I have no numbers), but what else would explain the sudden downturn in the Dow? The timing, along with the margin calls, was definitely could back up my theory. It is undisputed that after a great beginning, their was a sudden rash of selling in the Dow that brought it way down. What else would have accounted for this? I don't think I would buy the "mirroring Nasdaq" argument since it started out so well when the Nasdaq didn't.
hecubus	posted 04-05-2000 12:14 PM From what I heard, the first set of margin calls were triggered by the sell-off in the Nasdaq on Tuesday, meaning people probably started acting early on yesterday to get the cash to cover them--not after the nasdaq was down. The Dow was positive for quite a while yesterday, as I recall, while the Nasdaq started to fall right off the bat. This suggests to me that people were not looking to dump the Dow to cover their calls. Then, once more calls came in and everyone lost their overconfidence about the markets, everything was being sold.
JHirsch	posted 04-05-2000 11:49 AM Stop loss levels aren't necessarily due to investor psychology. Possible reasons for them are to mitigate risk, or to lock in profits, or to make sure you can cover a margin call. The argument mojo makes about stop losses being triggered and triggering other stop losses can be just as easily made substituting margin calls for stop losses. MaxPower, do you have numbers to back up the explanation you gave, about people selling the dow stocks to cover margin calls, because I heard the exact opposite story from a couple sources? It was definitely different people buying different stocks back after the dive from what i've heard at least... The ones who bought back the tech stocks were people who had been sitting on the sidelines for months thinking tech stocks were too high. I actually got the impression that it was old economy stocks (and some tech blue-chips) that basically brought the indexes back in the late afternoon. uncleharley, I thought telecom stocks were the biggest ones that got creamed yesterday.
mojo	posted 04-05-2000 09:58 AM Margin calls probably played a role, but I think the main driver in yesterday's big drop and big recovery was investor psychology. The Nasdaq went down in a straight line, then abruptly stopped and went up in a straight line. Why? A lot of tech investors set stop loss levels to limit how much they can lose. The market started falling and some stop losses were triggered, leading to selling, leading to more stop losses being triggered. At the same time, the prevailing "wisdom" is to never try to catch a falling knife, so any potential bargain hunters simply waited until the market turned and then jumped back in.
MaxPower	posted 04-05-2000 08:47 AM Alot of people on TV yesterday (CNBC, etc.) were saying that the markets are showing why you need to move a little from technology and diversify. But I saw a completely different story. Early on, when the Dow was up and the Nasdaq was down big, the margin calls came. But then the Dow fell. The reason for this is that rather than sell off their technology stocks to cover margin, people sold off their dow stocks instead. What this says to me is that most people believe this is an anomaly and that they didn't want to lose their tech stocks, believing they will easily come back. It's a sign to buy more tech stocks, not diversify.
InvestorGuide Daily Administrator	posted 04-04-2000 06:38 PM Never has a 74 point drop looked so good. In the wildest day in trading history, the Nasdaq and Dow ended with moderate losses. Both markets opened well into positive territory, but around 1:30 EST, both indices were down 500+ points, point-losses not seen since Black Monday in 1987. Analysts believe that margin calls brought on by yesterday's Nasdaq slump drove the selling early in the day. Bargain hunters stepped in and brought the markets back to their closing levels. (source: CNNfn) http://cnnfn.com/2000/04/04/markets/markets_newyork/ Commentary: The only surprise about the continuing turmoil in the stock market -- and particularly in Nasdaq stocks -- is that so many people seem surprised by it in the first place. (source: MSNBC) http://msnbc.com/news/390740.asp
uncleharley	posted 04-04-2000 06:25 PM I like that chart. MCI WorldCom [wcom] and Global Crossing [GBLX} seemed to be the most stable. I'm not sure that means anything, just a thought.
wassup?	posted 04-04-2000 04:47 PM WOW! What a day. The charts are amazing, right about 1:30 there is this awesome bottom. I saw this table on thestreet.com which gives the prices at 1:15 and at the close from a lot of big name stocks. Yahoo picked up 35 points over that stretch. http://www.thestreet.com/br/ But, the moral of the story is that margins can be SCAARY. The way everything can get swept into the vortex of hell because a small portion of investors are crazy enough to ride the margins...thank goodness for the bargain hunters.
charlie1	posted 04-04-2000 01:21 PM This is total carnage. I've been expecting it for a while, but not necessarily expecting so much to happen in the span of two days. I'm also a bit suprised how much the dow is being dragged down by the Nasdaq.
Machiavelli	posted 04-04-2000 12:30 PM If you are a long term investor like myself, even 300 drops during consecutive days in the Nasdaq shouldn't bother you. As always, our primary concern with our stock is earnings and growth, and short term market movements don't reflect our companies' realities. Sure it's painful to see some of those profits disappear, but they will be back. If anything, it makes me want to be less tech heavy and a little more diversified, but I still believe in each of the companies I invest in, so no jumps from high ledges from me.
InvestorGuide Daily Administrator	posted 04-03-2000 06:49 PM Rotation from "new economy" to "old economy" stocks continued today as the Nasdaq plunged a record 350 points on a day when the DOJ ruled against software juggernaut Microsoft in its antitrust case (see below). The Dow, however, shrugged off the 14% drop in Microsoft shares and gained 300 points on the day. (source: CNNfn) http://www.cnnfn.com/2000/04/03/markets/markets_newyork/
netinvestor	posted 04-03-2000 04:50 PM Not till after I hear what happens to Microsoft.
terrific	posted 04-03-2000 04:45 PM Ouch! Techs got clobbered today (down almost 8% on average). Anyone using it as a buying opportunity?
InvestorGuide Weekly Administrator	posted 04-03-2000 12:38 PM Why did the Nasdaq plummet this week? Some famous analysts sound off. (source: Forbes) http://www.forbes.com/tool/html/00/Mar/0330/mu3.htm OPEC and Goldman Sachs analyst Abby Joseph Cohen moved the markets last week. (source: Red Herring) http://www.herring.com/investor/2000/0329/inv-luskin032900.html

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