For a few seconds, it felt like a time warp back to 2011. A bank in Portugal ignited fears of global debt contagion, and the S&P 500 had its worst intraday decline since April 10. Then a funny thing happened: Stocks rebounded. But, is the bank flare-up in Europe cause for concern? Erin Gibbs, equity chief investment officer at S&P Capital IQ, sees concerns of Portugal’s Banco Espirito Santo as an isolated incident. She notes that Portugal is a small percentage of the European Community’s economy. Portugal’s GDP is under $220 billion, roughly the size of Oregon’s. “I see this as more of a healthy pull back,” Gibbs said. “When you look at the U.S. economy we’re doing very well right now. Q2 earnings are on track for about 7½ percent growth. The S&P may be trading a little at the top if its range – about 16 times forward earnings – but considering that earnings growth is looking so good going forward, we can still expand for several months.” Instead, Gibbs views the recent selloff from the record top as a small correction during the summer doldrums. “I just see this as not really having an overall impact on the global economy,” she said. “I don’t see this trickling over. And, I think overall the U.S. is in good shape.” Ari Wald, head of technical analysis at Oppenheimer & Co., also believes the S&P 500 is in good shape and that any small weakness would be a healthy pullback. http://finance.yahoo.com/blogs/talk...tion--has-traders-freaking-out-185417423.html
I remember when there was a flash crash about 4 years ago, and the Dow dropped like 1000 points briefly. It can be a wonderful buying opportunity.
It seems like these kind of dips in the market cause a lot of stress and worry even if they don't last more than a few days. Sometimes I think this is more the result of the media than anything else, just cashing in on the psychology of bad news selling better than good news. Are people really investing so short term that little dips like this cause that much of a problem? I have to think the average investor is holding on to their stocks long enough to weather through such storms.
I think the correction was quite strong for such a small outside problem. However, with the amount that markets have been going up lately, people are going to be extra jumpy with bad news and they are going to be worried about anything that could lead to the next crash and they'll want to be ready to get out.
Is everyone on drugs or something? I mean a 1% correction and everyone is freaking out in the stock market. That is quite funny I bet it must have been some folks trying to pull someone's leg.
