Why does the news seem to affect the stock market more now than in the past?
(When bad news hits, the market drops significantly. We already know about the mortgage problems, that the banks are hurting and so forth, yet when this is on the headlines, people panic. What’s the deal?)
Answer :
Perhaps the economic news are now more bad than before.
And it’s not just the headlines that affect the stock market. Companies are now reporting their earnings and/or losses. And stock traders are watching these earnings reports very closely.
Citigroup has recently reported a $10 billion loss in the fourth quarter. And that’s not the kind of loss any self-respecting stock trader can scoff at.
Some other companies may be hiding big losses like that too. But eventually these companies will have to come clean. And that’s what the stock traders are afraid of.
Posted: August 9th, 2010 under US Stock Market.
Tags: Stock market