The market, already slouching toward a dreary weekend, gets slammed on Friday giving investors a sour mouth. This Friday's special came from a familiar place. While there was no downgrade, the note accelerated the selling in the major indices, driving the major averages to one of their worst full-week performances. Like driving in circles, it all seemed similar. Cisco delivered a nifty 400-point loss in the Dow Jones Industrial Average Monday and helped drive the market lower throughout the week.
Investors continue to wait, watching companies warn of eroding profit margins and a cloudy future.
That's why you can't muster sustainable rallies. When you take away aggressive money, the nonaggressive money wants to get out at anywhere but the low, which caps the upside. Or the growing hope that this will be like 1998, a brief lull that presaged roaring gains in stocks, especially in technology. There were a number of different theories why Wednesday was such a poor session, but consensus centered around massive selling by either hedge funds or Japanese institutions that had significant positions in European securities. The market bounced back from those harrowing futures levels Wednesday morning, lending credence to the theory that it was an isolated event, but succumbed later in the day amid more worries about overall global deterioration.