why did the stocks have such a bad day today ?

Question

please clue me in if anyone have any idea .

Answer 1

Generally, I think the media is compelled to offer a reason as to why the market moved how it did on any particular day, although most of the time its just for the sake of having something to say. Today was no different; you can say it was China and economic growth, but my philosophy is that day-to-day, the market will do what the market will do. Its not as comforting as "stocks pulled back following poor economic data out of China", but such is life... my take is that the markets were overextended with buying activity and traders needed to take money off the table. Just stay calm and focus on evaluating individual companies, not "the market"... turn off CNBC, whatever, just don't get caught up in the panic. If you want a little bit of reading that I think offers a little perspective, I suggest http://www.valuestockreports.com/022707.htm

Answer 2

Well it started when one finance minister in China decided that they must change the " margin" buying policies ( borrowing) in their stock exchange.... some Asian mkts took it wrong and people saw it as a weakness in the markets ...so they sold off stocks ( to preserve the fantastic profits they have been making for the last five/six years)... when the European markets did thesame...the U.S. did too. It has been a long Bull market with very few setbacks ( normally 2/3 a year minor bad days) so everyone has been "expecting" something like this...so it just got overdone.
There is nothing wrong with the economy of China,( they are still going to keep building, expanding, buying materials, using fuels, etc.... as are we....so gradually buying and selling will get back to normal. Right now regular traders are awake trying to figure the best bargains with all the price drops...it'll take a few days or weeks to see the buying really pick up and maybe 'til the end of summer to get that 468 points back....or maybe not.
Just like every other bit of news ( Britney, Anna Nicole, Obama) overdone in it's importance by the press.

Answer 3

The entire world's array of stock markets had a pull-back. Nothing in previous months of slow climbing suggested that they would be vulnerable to negative reports.
A host of negative reports began in a relatively short amount of time, from Greenspan's suggestion of a world recession to China's big drop.
The question at this point is whether there is sufficient capital around to allow for buying back in by the big mutual funds who have a great deal of the markets' ownership.
When the Dow dropped in a minute,( some several hundred points and the computers were in a state of flux) that suggested that buying back could be delayed...for how long, anybody's guess.
Until the big boys come back in, the markets will feed on a frenzy, and take hit by hit.
I wanted to call attention to an event that took place a week before the crash of 1929. The president of one of New York's biggest banks then was asked how he felt the economy was going.
His reply was that it never was better.
I'm not saying that history will repeat itself.
I am saying that we've been lulled into a rosey scenerio for stocks for a long time now.
I wouldn't listen to Alan Greenspan since his "exhuberance" speech of Dec. 1996 saw a Dow Jones at 6,600. It's doubled ever since.
This could be the long awaited correction in the making, or it could foretell of something worse.
Again, the key is the buying back in.
I don't consider buying back in when in the last hour of trading, the market came back from being down 540 points to only being down 416 points for the day. I need to see more.