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By Pehon | August 5, 2007
Once again, the Dow Jones Industrial Average closed sharply lower by 281.42 points or 2.09%. The Dow Jones Industrial Average is currently 13181.91, about 820 points from its record close of 14,000.41.
This is the 3rd time in 2 weeks trading curbs has gone into effect.
So what caused the sharp fall?
So what is the Non-Manufacturing Index? Its a purchasing survey that is widely used to measure the health of the United States service economy. It fell to 55.8, below what analysts forecast. The main component that caused that fall was the employment component of the index.
On the other note, US employers only added 92,000 non-farm jobs in July, much less than the 130,000 analysts forecasted. The unemployment rate rose to 4.6%.
What we are looking at now is the battle of the bulls and bears. The direction of the market is going to be dictated by whats on the head lines. If there’s news of good results, the market should be looking “greenish”. However if the subprime market comes to the headlines, the market will look “redish”.
Anyhows, I maintain my stand of remaining vested. Doesn’t matter what the market direction is for the next month. P/E ratios are generally low, and earnings are good. Those are what matters.
Topics: Indexes&Economy |
August 5th, 2007 at 10:52 pm
hi, i read your articles with interest.
And had bottom pick China HongXing this week at 71c.
so do you buy any ‘insurance’- like put warrants for your portfolio in case the market direction turns really bad.
August 6th, 2007 at 8:35 am
I didn’t buy any “insurance” for this correction. I never thought the correction will be as bad as it is. In fact i expected last tuesday to be the last day for the “reds”.
As mentioned in one of my post, i did buy insurance on the last correction at the start of the year