72.1 F
Fort Worth
Thursday, November 26, 2020
Banking Stock drop rattles investors after long market run-up

Stock drop rattles investors after long market run-up

Other News

Exxon’s oil slick

Exxon Mobil is slashing its capital spending budget for 2020 by 30% due to weak demand caused by the COVID-19 pandemic and a market...

Folk music’s Mark Twain: 7 Essential tracks from John Prine,

NEW YORK (AP) — Some people, the songs just come out of them. For nearly half a century, they tumbled out of John Prine...

Tarrant County records another COVID-19 death

Tarrant County Public Health (TCPH) on Wednesday, April 8 reported that a resident of Euless has died as the result of the COVID-19 virus....

Tradition stymied: A year unlike any since WWII for Augusta

The Masters is so intertwined with Augusta, they added an extra day to spring break.You see, the first full week of April isn't just...

Working alone at home, Erik Lovequist often turns on a TV sports channel to supply background chatter. But when stock prices plummeted Monday afternoon, the music research specialist quickly flipped to a financial news show and leaned in to listen.

“I don’t follow it all the time,” said Lovequist, of Billerica, Massachusetts. He was among the millions of individual investors who, until the last few days, savored a bull market so steady it seemed nearly immune to a setback. “Then I saw something in the afternoon that the Dow is down 1,000 and I thought ‘What?!”

If it’s any reassurance to Lovequist, he is hardly alone.

The 1,175-point drop in the Dow Jones industrial average Monday — about 4.6 percent of its value — capped two days of losses that have erased the stock market’s gains for the year. The Dow is still up 21.3 percent over the last 12 months. But while many investors took comfort in the possibility that the setback to their retirement and college nest eggs might be short-lived, the sell-off still felt like a shock to some.

The run-up has been so strong for so long, even some who told themselves the market would reverse directions eventually were caught off-guard.

“Everybody was riding pretty high on how the markets were doing before and all of a sudden something that seems relatively optimistic has just come crashing down,” said Chris Cornutt, a security engineer in the Dallas area who has been putting money into stocks in hopes that they will help put his two grade-school-age children through college.

Cornutt, 40, said he usually checks on the value of those investments once every few days. But on Monday he kept the stock charts up on a second screen of his computer at work, his aggravation growing the farther the indices dropped.

“I think everybody got lulled into a false sense of security,” he said.

On Wall Street, traders took Monday’s drop in stride, noting the tremendous changes in the markets since crashes like the one in 1987 that saw the Dow lose nearly 23 percent of its value in a single day.

With the modern market’s computerization and built-in stop orders, “you’re not going to have a 1987 kind of fear that spreads from guy to guy,” said Stephen Guilfoyle of the private trading firm Sarge986. Still, he said, as stocks dropped Monday “people were looking at each other.”

Matthew Cheslock, an equity trader at Virtu Financial, played down the drop.

“It’s not a panic sell … this is just a case where the market has gotten a little ahead of itself,” he said.

Some Main Street investors agreed with that sentiment, saying they had no intention of withdrawing from the market.

“It’ll come back. It always does,” said Brandon Sweet, an insurance salesman in Farmington, Connecticut. On Monday he tweeted “RIP my 401k,” but said he was really trying to make light of the situation. At 30, Sweet said he figures he has many years until he needs the money in his retirement account. “Who knows? Next week it could be up, up, up.”

“You know, the market doesn’t go up in a smooth curve and it doesn’t go down in a smooth curve,” said B.D. Softley, a data base analyst in Lincoln, Nebraska, who is an active investor. “The worst thing to do in a downturn is to panic.”

Lovequist, who is 51, said he, too, intends to sit tight, reassured in part by the sizeable gains over the past year in the nest eggs he and his wife are setting aside for retirement. Until a week or so ago, those returns had been so robust, he’d begun wondering if they might not be able to stop working a couple of years ahead of their original schedule. But even with the setback, he’s still feeling pretty good about the substantial gains over the past year.

“I’ve been kind of waiting for today to happen to be honest because there’s just so high it can go,” he said.


AP reporter Deepti Hajela in New York contributed to this story.


Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

Stocks edge higher on Wall Street on latest vaccine hopes

NEW YORK (AP) — U.S. stocks edged higher in morning trading Monday after investors received several pieces of encouraging news on COVID-19 vaccines and...

Mnuchin denies he’s trying to hinder incoming administration

WASHINGTON (AP) — Treasury Secretary Steven Mnuchin denied that he is attempting to limit the choices President-elect Joe Biden will have to promote an...

Bank of America announces $2.65 million jobs initiative for Texas Black and Hispanic-Latino students

Bank of America announced a new multimillion dollar jobs initiative Nov. 19 to help students of color complete the education and training necessary to...

PNC to buy US unit of Spain’s BBVA bank for $11.6 billion

NEW YORK (AP) — PNC Financial Services Group said Monday it is buying the U.S. subsidiary of Spain's BBVA bank for $11.6 billion in...

Banker gets 1-year term for coronavirus relief funds fraud

By MATTHEW BARAKAT Associated PressALEXANDRIA, Va. (AP) — A northern Virginia banker who admitted illegally receiving $1.4 million in fraudulently obtained coronavirus relief funds...