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The market's August lull nears an end; stocks fall
Source: Agencies |
August 31, 2012, Friday
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THE late-summer lull is about to end.
Stocks fell yesterday, with investors too worried about high gas prices and stagnant employment to be impressed by higher consumer spending.
But trading volume was light, the market's direction was steady, and there wasn't much in the way of major economic news.
That could all change today. Federal Reserve Chairman Ben Bernanke is scheduled to speak at 10 am EDT (1400 GMT), and investors will be listening closely for his opinion on the economy and whether the Fed will take more action to try to prop it up.
The Dow Jones industrial average closed down 106.77 points, or 0.8 percent, to 13,000.71. The Standard & Poor's 500 fell 11.01, or 0.8 percent, to 1,399.48. The Nasdaq composite slid 32.48, or 1.05 percent, to 3,048.71
Scott Freeze, president of Street One Financial in Huntingdon Valley, Pennsylvania, had the feeling that he was experiencing the calm before the storm. He went golfing yesterday morning with clients, figuring there wouldn't be many more chances to leave the office.
Many of his employees and clients planned to come to work this morning, stick around to see what Bernanke says, and then leave early for the long weekend if it's nothing of consequence.
"There's so little going on, it's all wait and see before Bernanke's speech," Freeze said. "I'm sure next week will be a much different scenario."
Some thought Bernanke's speech, for all the hype, would end up being a non-event. The statements from Fed officials are sometimes too ambiguous to really guide the market. And there's a lot of doubt that the Fed can do anything for the economy anyway.
"Some people hang on every word, they try to figure out what kind of briefcase he's carrying," said John Lekas, senior portfolio manager at Leader Capital in Portland, Oregon. "I think that's a waste of time. It doesn't matter that much."
For much of August, with many traders on vacation and a dearth of major economic news, the market has lumbered more than galloped. About 2.4 billion shares were traded on the New York Stock Exchange yesterday. The average for the year so far is about 3.7 billion.
The economic news that did surface Thursday was uninspiring to investors.
The government reported that consumer spending rose in July from June, after a flat June and a decline in May. Separately, retailers like Target Corp., Gap Inc. and Macy's Inc. reported higher-than-expected August sales.
But rather than send stocks up, investors instead worried that the gains were only temporary, driven by back-to-school shopping that will soon peter out.
Stocks fell yesterday, with investors too worried about high gas prices and stagnant employment to be impressed by higher consumer spending.
But trading volume was light, the market's direction was steady, and there wasn't much in the way of major economic news.
That could all change today. Federal Reserve Chairman Ben Bernanke is scheduled to speak at 10 am EDT (1400 GMT), and investors will be listening closely for his opinion on the economy and whether the Fed will take more action to try to prop it up.
The Dow Jones industrial average closed down 106.77 points, or 0.8 percent, to 13,000.71. The Standard & Poor's 500 fell 11.01, or 0.8 percent, to 1,399.48. The Nasdaq composite slid 32.48, or 1.05 percent, to 3,048.71
Scott Freeze, president of Street One Financial in Huntingdon Valley, Pennsylvania, had the feeling that he was experiencing the calm before the storm. He went golfing yesterday morning with clients, figuring there wouldn't be many more chances to leave the office.
Many of his employees and clients planned to come to work this morning, stick around to see what Bernanke says, and then leave early for the long weekend if it's nothing of consequence.
"There's so little going on, it's all wait and see before Bernanke's speech," Freeze said. "I'm sure next week will be a much different scenario."
Some thought Bernanke's speech, for all the hype, would end up being a non-event. The statements from Fed officials are sometimes too ambiguous to really guide the market. And there's a lot of doubt that the Fed can do anything for the economy anyway.
"Some people hang on every word, they try to figure out what kind of briefcase he's carrying," said John Lekas, senior portfolio manager at Leader Capital in Portland, Oregon. "I think that's a waste of time. It doesn't matter that much."
For much of August, with many traders on vacation and a dearth of major economic news, the market has lumbered more than galloped. About 2.4 billion shares were traded on the New York Stock Exchange yesterday. The average for the year so far is about 3.7 billion.
The economic news that did surface Thursday was uninspiring to investors.
The government reported that consumer spending rose in July from June, after a flat June and a decline in May. Separately, retailers like Target Corp., Gap Inc. and Macy's Inc. reported higher-than-expected August sales.
But rather than send stocks up, investors instead worried that the gains were only temporary, driven by back-to-school shopping that will soon peter out.
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