Market makers initiated the selling after the announcement. The downgrade news of banks is used to convince market participants the selling signal. Also, the selling is worldwide in order to create an atmosphere for panic selling. Market participants are already cautious of the market and maintain a portion of the portfolio in cash or equivalent. Therefore the trading volume increases modestly despite a large drop. Market participants are maintaining the core portfolio despite a sharp drop in overall valuation. Institutional investors have increased cash holding before the sell-off and are waiting for re-entry point.
Investors are less panic than previous sell-off. Market participants are not dumping the core positions. A large portion of shares are exchanged among the hands of speculative day traders.
President Bill Clinton: Yes, The American Dream Is Under Assault
The nation's official poverty rate was 15.1% last year, that equates to a record 46.2 million Americans living in poverty. With poverty levels rising for the past three years, average median U.S. income falling back to 1996 levels and income inequality at the highest levels since the Roaring 1920s.
In lesser-developed countries, just "modest investments" in agriculture can generate "enormous" income for citizens, and help very poor countries start feeding themselves again, he says.
In the developed world, Clinton says an "enormous numbers of jobs" can be created by renewed commitments to energy efficiency. "The U.S. is about twice as energy efficient as we were back in the first oil embargo in the 1970s but more than twice as inefficient as our largest competitors," he says.
Stock buybacks rise for 8th consecutive quarter
America's biggest corporations rewarded shareholders by spending more money on stock repurchases for the eighth consecutive quarter.
Buybacks reward investors by increasing the value of remaining shares, and per-share earnings results, as shares are taken off the market, and earnings are divided among fewer shares.
Despite the heightened buyback activity over the past 24 months, buybacks remain below their historic peak in the third quarter of 2007, when repurchases totaled a record $172 billion.
Repaying Buffett Has Its Upside
Mr. Buffett’s money does not come cheap, so it’s logical that G.E., as Goldman did recently, would seek to exit the deal as soon as possible. The perpetual preferred stock carries a dividend of 10 percent and can be repurchased at a 10 percent premium.
A Taxing Idea
An Italian megatax would be a game changer. A one-time wealth tax of 400 billion euros (about $550 billion), as proposed by the former UniCredit chief Alessandro Profumo, would solve Italy’s debt problem, thus helping reverse the euro crisis in general. Italians are wealthy enough that they could afford it.
In the US, two housing markets and two directions
In America, it's starting to feel as if there are two housing markets. One for the rich and one for everyone else.
Think of this housing market as bipolar. In the luxury sector, the recession is a memory and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.
The one with outdoor kitchens and in-home spas; with his-and-her boudoirs and closets the size of starter houses. The one that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.
The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks versus Walmart. Pay on Wall Street versus Main Street. Corporate profits versus family balance sheets.
"In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not," says Peter Zalewski, founder of the real estate firm Condo Vultures.
“Very Unusual” Fed Action Fails To Boost Animal Spirits: Dow Drops 285
Specifically, the Fed announced plans to buy $400 billion of long-term Treasuries and sell an equivalent amount by the end of June 2012. The so-called Operation Twist will not change the size of the Fed's balance sheet but the duration of its Treasury holdings.
Global Markets Sell Off on Significant Economic Concerns
Three little words within a six paragraph statement released yesterday afternoon by the Federal Reserve have global markets in panic mode. The key phrase "significant downside risks" used by the Fed is an observation that in and of itself is not breaking news. Aside from the forecasters at the White House, no one was expecting an optimistic view on economic growth.
I am not trying to trivialize this sell-off, or suggest anything other than (my longstanding) angst for the US and global economies. I am trying to draw a line between selling and panicking. When basically every market and asset class in the world drops 3% to 10% (with exception to Treasuries and the US dollar), it suggests that something major just caught the market by surprise.
The "trading range" trend is still intact, and potential for a good buying opportunity can't be far off. Unless, of course, we get a string of forecast reductions like we got from FedEx (FDX) today, or some other unexpected external shock to the system.
Stocks may be cheap. But they can get cheaper yet
Someone is about to play the fool -- Wall Street analysts or investors.
For months, analysts who write reports praising or panning stocks have been saying they were cheap. Investors were unconvinced, buying one day, selling the next. Last week, they mostly sold, and stocks got cheaper yet.
At Friday's close, the S&P 500 was trading at 10.6 times analyst estimates for earnings over the next 12 months. That's low for this so-called earnings multiple, which could mean stocks are cheap. When stocks bottomed on March 9, 2009, they were trading at 10.4 times estimated earnings. The 10-year average is 15.
"The highest growth for companies has been in the emerging markets," says John Butters, senior earnings analyst at FactSet. "We're getting mixed signals."
Harris Private Bank's Ablin says analysts are "out to lunch" with their cheery projections. But he thinks investors may have overreacted, too. He says they're selling as if earnings will fall 20 percent or so next year, which he thinks won't happen.
Mulling Meg Whitman: HP considers CEO shakeup
HP is facing a classic big-company problem: How to meaningfully grow revenue. But it's also facing an identity crisis. The company's trying to figure out whether it works best as a technology conglomerate that can be all things to all customers, or as a more streamlined operation that does only a few things well.
Apple's Silence on iPod Speaks Volumes
Sales of the IPod are in decline. Over the past four quarters, unit sales are down 12.5% from the prior year, while revenue has fallen by 6.2%. That's probably why more than half of September has gone by without a single word from Apple about what has for several years been a company tradition — holding an event during September devoted to the newest versions of, and changes to, the iPod.
Apple's not likely to build an event around a product that's in retreat, even if it's the one that arguably saved the company, revolutionized the music industry and made investors happy as Apple's shares have surged a split-adjusted 4,562% since the music player made its debut on Oct. 23, 2001.
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