Richard, thanks for that insightful post. Here's an article from wsj that is what your talking about.
The whole market sold off friday because of speculation from the japanese finance minister----
"The dollar jumped against the yen amid signs that Japanese Finance Minister Kiichi Miyazawa is not planning measures to bolster the yen against the dollar. It was slightly lower against the mark.
ÿÿÿÿ Mr. Miyazawa said earlier Friday in his inaugural press conference that "n extreme circumstances, there will be something like the past U.S.-Japan joint intervention, but such things" shouldn't happen often."
Emboldened by his remarks, the dollar jumped against the yen, reawakening fears that China may move to devalue its currency. Many worry that a devaluation of the yuan would lead to a domino effect, forcing other countries in the region to devalue their currencies----
(reading between the lines he's saying- we want the U.S. to chip in or were going to let the yen slide (IMO))
Without this japan worry, the market seems to have more positives than
negatives. I quess we'll have to wait and see.
-----
Stocks Fall Sharply
As Bonds Steady
After GDP Report
By TERRI CULLEN
INTERACTIVE JOURNAL
ÿÿÿÿ Stocks tumbled in a late-session sell-off Friday, and bonds steadied as investors reacted to an unexpectedly robust second-quarter gross domestic product report. The dollar was mixed against the mark and yen.
ÿÿÿÿ The Dow Jones Industrial Average dropped 143.66, or 1.59%, to 8883.29. The decline marked the 7th biggest point drop this year, and ranked 21st for all-time. The industrials have lost 454.69, or 4.8%, since hitting a record 9337.97 exactly two weeks ago.
ÿÿÿÿ Companies that have been hammered the recent sell-off on worries about earnings came under a renewed assault Friday. Procter & Gamble and Merck led the industrial's decline, with the consumer-products giant closing off 4 1/4 to 79 3/8 and the drug powerhouse down 2 5/8 to 123 9/16.
ÿÿÿÿ The Nasdaq Composite Index tumbled 47.19, or 2.46%, to 1872.39, as investors deserted its dominant technology sector. Small-capitalization stocks, which have fallen sharply in 10 of the last 11 sessions, also fell sharply. The Russell 2000 index dropped 9.75, or 2.26%, to 419.75 after snapping its nine-session losing streak Thursday.
ÿÿÿÿ The Standard & Poor's 500-stock index slumped 22.28 to 1120.67 and the New York Stock Exchange Composite Index lost 9.99 to 565.27.
ÿÿÿÿ The bottom fell out of the market in the last hour of trading as investors rushed to the exits, fearful of what the weekend might bring from the Asian markets. The downdraft caught many analysts by surprise. "I've been very negative about the market for a long time, but even I was looking for a two-day bounce," said Richard Scarlata, director of research at Sutton Financial Services, who said he saw no specific catalyst for the sell-off.
ÿÿÿÿ Investors remained skittish about market conditions in general, he said. "Cash inflows into stock funds have slowed dramatically in response to White House and Asia-related problems, and the strong dollar. All those are factors that are all negatives hanging over this market."
ÿÿÿÿ A strong second-quarter GDP reading released early Friday added to the uncertainty. The Commerce Department reported that the total value of all goods and services produced in the economy expanded at a 1.4% annual rate in the second quarter. The data surprised analysts, who believed that the fallout from Asia's financial crisis had slowed growth in the U.S. economy to a crawl in the second quarter. The consensus forecast was for an unchanged reading.
ÿÿÿÿ The GDP report shows that the economy remains strong, said George Cohen, principal at Cohen Klingenstein & Marks, which bodes well for corporate earnings over the next several quarters. But the healthy economy failed to impress Wall Street, he said, because there's "a lot of confusion and doubts weighing on this market for a whole slew of reasons -- Asia, corporate profits, the dollar -- and as long as the doubts and confusion linger you'll continue to see the volatility we've seen this week."
ÿÿÿÿ Bonds eased a bit before steadying, with many investors shrugging off the GDP data. While signs of robust growth in the economy would normally rattle the bond market, analysts noted that the report showed few signs of price pressures, indicating that inflation remains in check. Inflation erodes the value of fixed-income holdings such as bonds.
ÿÿÿÿ The dollar jumped against the yen amid signs that Japanese Finance Minister Kiichi Miyazawa is not planning measures to bolster the yen against the dollar. It was slightly lower against the mark.
ÿÿÿÿ Mr. Miyazawa said earlier Friday in his inaugural press conference that "n extreme circumstances, there will be something like the past U.S.-Japan joint intervention, but such things shouldn't happen often."
ÿÿÿÿ Emboldened by his remarks, the dollar jumped against the yen, reawakening fears that China may move to devalue its currency. Many worry that a devaluation of the yuan would lead to a domino effect, forcing other countries in the region to devalue their currencies.
ÿÿÿÿ World-wide, stocks dropped in dollar terms. The Dow Jones World Stock Index fell 2.44 to 191.49 as of 5 p.m. EDT.
ÿÿÿÿ In major market action:
ÿÿÿÿ Stocks dropped. Volume on the Big Board was heavy for a Friday at 641.7 million shares, with 2,212 stocks declining and just 775 advancing.
ÿÿÿÿ Bonds steadied. The 30-year bellwether U.S. Treasury bond was up less than 1/8 point, or $1.25 per $1,000. Its yield, which moves in the opposite direction from the price, stood at 5.71%.
ÿÿÿÿ The dollar was mixed. It was at 1.7765 marks and 144.60 yen, compared with 1.7805 marks and 143.72 yen late Thursday in New York. |
