RSD, just to amplify what I am trying to say, it is that stocks such as MSFT, GE, IBM, INTC...Dow stocks, top five OEX, top ten SPX... they will move down or up =more= in response to "world events" as it were, than their own news. Sure IBM may announce 10% more service contracts are forecast, but if Israel invades Syria, and the market drops, IBM will go along, because that news is bigger than company-specific news. Or Greenspan makes an announcement, and IBM says they have an accounting scandal, the announcement gets overlooked. An equity such as PeopleSoft may actually be travelling up while the market is falling, but its own news, when significant, will produce a percentage drop you would =never= see with IBM.
Stocks such as IBM which are large components of indexes ( and "most stocks" are obviously not) tend to trade in complicated hedges by large houses (MLCO, GSCO). Has the market followed EMC the last 24 months, and has EMC been pretty much like the DJIA??
This is what I am trying to say: For large influential stocks, they "follow the market" because, essentially they =are= the market. If they don't create the news (e.g. Intel warns) then they go along with the news (Enron accounting). In that context, I view Winnebago saving $150k not worth mentioning. I've seen more millions saved at BAC, and it made =zilch= stock price difference. |
