did you stock market overacted this enitre week?

Question

especially tech stock are dropping like it's hot..

don't people remember all the great earnings reported just a week ago or two?

but one not as expected earning from cisco and fed speech make EVERYTHING go down.. what's the deal here?

Answer 1

Let me see if I can answer more specifically than the others.

The panic started with sub-prime securities & credit crisis blah blah, the falling dollar and nearly $100/barrel oil. These facts have cause big financials to declare 10's of billions in losses.

And because of high gasoline and dropping home values (& now stocks), people aren't as rich or don't feel as rich. So retail stinks. Financials and Retail have tanked for very real reasons.

But investors were "hiding out" in tech stocks, because most of these company's profits come from overseas. Plus market analyst firm Gartman has said that corp. cap-ex spending on tech is on a big upswing. Intel and Microsoft have confirmed that recently.

Then Cisco said that US cap-ex orders were weak for some of the bigger customers, namely financial companies. Probably these orders are being delayed a quarter or two, because many of these companies are operating in crisis mode. No unnecessary spending is allowed until further notice!

But the US market comprises 13% of Cisco's business and the other 87% is doing fabulous. They beat estimates and maintained guidance (but didn't raise guidance, booh hooh).

However, investors now assume that US corp. cap-ex on tech is in the toilet. That includes INTC, AMD, HPQ, DELL, & MSFT; time to sell all tech. Did they forget that these companies sell a lot more overseas than in the US??

While Fed rate cuts do cause a 1 or 2 week pop in the markets, their dominant effect takes 6 to 12 months to boost the economy.

Answer 2

1. Ok lets face it. The economy sucks and it sucks big time. One of the reasons why the market is nose diving to an extent is because the dollar is amounting to squat right about now in the world. A weak dollar means, less confidence from foreign investors, overall the entire market. Because a declining dollar, some feel it is a sign of inflation making a rise. Which means our money will be practically worthless.

2. Oil keeps rising because of our dependency on the damn stuff. Alternate fuels are the only answer. And if you say that can't happen for 10-20yrs. Your wrong it can happen now. Reason why. Big Daddy Oil has full reign over our politics. These are companies that make billions in a year and they only donate a few hundred million? Come on anyone else see them dragging their feet.

3. Because all these corporations like to inflate their earnings by messing with the numbers finally hit a wall and say oops we aren't going to make that 2 billion we predicted, rather we are going to lose 4 billion because of faulty accounting.
Financial institutions have also screwed up the economy by giving loans to people who can't afford the amount they own. So a credit crisis doesn't help a struggling market.

4. Lowering interest rates only gives a shot in the arm for about a week or two. It also doesn't help when CEO of some these big companies say this is the worst they have seen the market in some time and the FED giving warnings of a possible economic recession (not said directly, but everyone can read between the lines).

5. Having a war does not help one bit. Allocating monies we don't have in the first place doesn't help national debt.

6. Politicians are to blame, because they are bought out by big business and they stopped caring for the people. Congress and the Presidency. (Sorry folks but a man that has bankrupted everything he had control of, you actually expected him to do a good job economically)?

7. In the end, everyone is afraid of another recession, and many feel this will be a pretty bad one if it happens. They don't say it because if you panic the masses, you can only guess what the consequences may be.

In the end we need a change in politics, views, economics and thought process. Otherwise this country is not going to have a very nice century.

Answer 3

It's never about the past, but the future. The price of the present is already priced out. This price varies per person. For instance out of 1000 people 500 people think the stock of company XYZ should be $20 per share. 250 of those people think it should be $19.50. 250 people think it should be $21. When looking into the next quarter, 250 think it will be worth $19, 250 think it will be worth $19.50 $250 think it will be worth $20 and 250 think it will be worth $22. Now if the stock would be on a down trend unless those 250 have the money to keep it on an up trend. Even if the 250 push the stock to $22, they have no place to sell it because most are only going to offer $20 or less.

The shift has turned toward believing there will be a downtrend, even though some people believe the market is still on an upswing. Anybody planning on unloading their stock has to unload as a steep discount as the buyers have become sellers with their own shares to unload. Eventually the markey will be undervalued and people will try to buy "bargins."

Answer 4

I think the amount of information available an instant after something occurs has really made the market overreact as traders try to squeeze out additional profit whenever they see news coming out. The amount of information out there is staggering, but the market forgets very quickly and good days can turn bad in an instant.

I do think it was a bit of an overreaction, but hopefully being a long-term investor like Warren Buffet and doing dollar cost averaging to smooth out the swings over time will turn out okay for me.

Answer 5

Did you really believe, that some companies like Google can maintain $500. The Stocks are ready to hit reality, at about 10,000. then you can expect them to go back to a normal 11,800 maybe, by end of the year.

Answer 6

Ummm.. I cant say yes, because it was time for a pullback. It was just too unhealthy with some bad news coming out and the market would be bought.

Answer 7

that is provide and demand... at the same time as a group of individuals worry the cost of their inventory will flow down (through another marketplace pressure) they panic and promote their stocks. the picture of with something else contained in the marketplace, at the same time as it receives flooded with multiple provide, the fee drops through the indisputable fact that is way less scarce. many human beings make investments the incorrect way. They see the marketplace is doing properly, so that they settle on that they want a chunk. Then the marketplace starts to decline and they panic that they are going to lose their money, so that they promote. in reality, you're extra positive off to make investments at the same time as the marketplace is down because you will get extra stocks on your dollar. Then promote at the same time as the marketplace is severe... you word?

Answer 8

The market was/is due for a 10% correction. It just happens ever so often. Time to buy.

Answer 9

no look for 11.500 dow we are in deep do do