Bond Insurer's Potential Bailout Plan Turns Market's Early Losses Into Gains.
Posted 2/22/2008
Stocks reversed sharply for the fourth straight session Friday, this time closing higher after shaking off early losses.
The Nasdaq followed Thursday's 1.2% loss with another decline early Friday. It was down about 1.5% in the session's final hour of trading. But a late rally carried the index into positive territory, closing up 0.2%.
The Dow industrials scored a bigger gain, finishing 0.8% higher. The S&P 500 matched that 0.8% advance, while the NYSE composite picked up 1%.
Volume picked up slightly on the NYSE and rose 4% on the Nasdaq.
The day's action capped a topsy-turvy week for the market. Four times the major indexes started in one direction, only to change course by day's end. Tuesday and Thursday brought negative reversals, Wednesday and Friday positive turnarounds.
That behavior points to a market that lacks direction, as well as any kind of conviction among big investors. A healthy market doesn't react that severely to every little headline.
The rally confirmed on Feb. 13 by the Nasdaq's follow-through day remains technically intact. But we need to see a lot more healthy gains in the broad market and leading stocks before growth investors can start buying aggressively.
Right now, you can almost count the market's total number of breakouts on one hand — most of those being late-stage commodity stocks.
For the week, the Nasdaq fell 0.8%. The NYSE composite fared better, advancing 1%. The Dow ticked up 0.3%, the S&P 500 0.2%.
Without Friday's late rally, the Nasdaq would have closed at its lowest level of the correction.
The session started with more weakness among battered financial stocks. Several beleaguered investment banks, weighed down by the impact of the credit crisis, flashed more losses early on.
2 comments:
It was crazy on Friday. Pulled back all the way in half an hour. Based on my readings, it seemed like some short covering activities. Anyways, my current view on the market is that it is oversold and waiting for further deterioration of economy to catch up before another leg down. This happens quite often in bear market. Market might be directionless however daily volatility will be very high. Just my 2 cents.
hehe today is crazy too:)
Normally large volatility at the low point would suggest bottom. we need to pay attention to this.
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