Why does the stock market go down?

Question

What are some things that affect it?

Answer 1

Stock prices move entirely on supply and demand. In addition, there is a limited number of shares available for each company.

When more people want to buy than sell, prices move up to entice holders of the stock to sell so that orders can be filled. When more people want to sell than buy, the price drops until people come in to buy the stock - helping fill the sell orders.

When the stock market falls, it is because there are more sellers than buyers in the majority of the stocks in the particular index. When it rises, the opposite is true.

If nobody were buying or selling, stock prices, and hence the markets, would not move at all.

Don't forget - prices are controlled by the big institutions: mutual funds, hedge funds, pensions. These guys do so much trading that they end up moving the stock prices around.

So, why does the market go up and down? Because the general concensus of insitutional investors believes that prices will go up or down, and they buy or sell accordingly, ultimately making their prediction come true (though not always for a profit).

Answer 2

> Why does the stock market go down?
More sellers than buyers.

> What are some things that affect it?
Unexpected bad news. Unanticipated increase in the price of energy. The Prime Rate not decreasing the way someone had predicted.

Answer 3

Many factors affect the stock market. Sometimes even the weather can affect it!! By investing in a public company you are buying the right to their future earnings. If their earnings are not what they have been in the past then the price goes down, investors become wary of the future of the company. Try reading "the intelligent investor" by Benjamin Graham, he was Warren Buffets teacher.

Answer 4

stock market has been booming, up up and up,,,,republican in office...hmmmm...economy is strong....consumer confidence up..hmmm.these are the facts..look them up, or if you follow business you already know this.
follow IBD.
Democrats tax tax tax...they are pushing for a "rollback" right now...they are pushing for tax hikes to cover their social programs, tax hikes are not needed. there will be a surplus by the end of 2008 at the current rate. if the democrats raise taxes the market goes down.

Answer 5

Investor confidence. The Federal Reserve and their tax policies. The performance of publicly owned companies. Inflation. Recession. Panic. Over exuberance.

Answer 6

Because of Republican cut backs in our economy. It is a statistical fact throughout our history that when the Republicans are in office, the stock market goes down; when the Democrats are in office, the stock market goes up, as they release more money into the economy and we all benefit.

When we have three consecutive Republicans in the White House we ALWAYS have a stock market crash.

Just facts; look it up.

Answer 7

only one thing for sure.
demand and supply.