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After
being down over 800 points this afternoon, the Dow staged a
furious rally in the last hour to close down only 370 points.
Nasdaq lost 84 points, while the S&P 500 dropped 42 points.
By
mid-afternoon, with the Dow showing it’s largest, single day
drop, it was clear that panic has set in. Investors have been
marked with depression in recent weeks as company failures,
depressing employment numbers and abysmal economic forecasts
dominated the headlines. However, the markets always seemed to
hold onto a shred of hope that the government would provide a
bailout package that would rescue us all from this disaster. Now
that Congress has passed a $700 billion bailout package,
investors are now truly panicking as they realize that the worse
is yet to come.
Small cap
stocks were absolutely pummeled today, as the small cap internet
sector lost 13.4%. Leading the sell-off was Miva (MIVA) which
saw it’s price drop over 41%. Autobytel (ABTL) fell 26%, while
Local.com (LOCM) dropped 20%.
Oil fell
$4.70 to $89.18 per barrel. However, that failed to buoy airline
stocks like similar drops have done recently. United Airlines
fell over 17% today after releasing disappointing traffic and
capacity numbers on Friday. Continental (CAL) and American (AMR)
also posted double-digit drops, falling 11% and 10%
respectively.
Discount
stores were one of the few sectors that managed to make gains
today. Family Dollar Stores (FDO), after announced better than
expected quarterly results on Friday, was up another 3.9% today.
That also lifted Dollar Tree (DLTR) to a 2.7% gain.
Panicking
investors did send gold prices by $30 to $863.20 an ounce.
However, the commodities sector finished mixed as silver dropped
to $11 and high grade copper fell over 9% to $2.46.
The
markets have seen several big sell-off days like this in recent
weeks. To date, they have all been follow-up by big rallies on
the following day. However, if the markets fail to recover and
in fact post another big drop tomorrow…..the panic will be
justified.
At the time this article was published, the author did not have
a financial position in any of the stocks mentioned in this
article.
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