The market roller coaster is making investors nauseous

Stock market volatility is back with a vengeance.On Wednesday the Dow was down nearly 320 points befo...

Posted: Oct 18, 2018 3:48 AM
Updated: Oct 18, 2018 3:48 AM

Stock market volatility is back with a vengeance.

On Wednesday the Dow was down nearly 320 points before rebounding from the worst of its losses. At one point, it even moved slightly higher. But there was more selling in the late afternoon and the Dow wound up finishing the day down more than 90 points. The S&P 500 and Nasdaq ended flat.

Banking, finance and investments

Business, economy and trade

Financial markets and investing

Securities trading

Stock markets

Company activities and management

Company earnings

Financial performance and reports

Financial results

Wall Street

The Dow's losses picked up after minutes from the Federal Reserve's latest meeting were released and showed some concerns about how long the economy could benefit from President Donald Trump's tax cuts.

In the minutes, the Fed indicated that some members were worried that "the stimulative effects of the changes in fiscal policy would likely diminish over the next several years."

Mixed bag in tech and worries about slowdown in housing

Earlier in the day, strong earnings from Netflix failed to ignite the market. Even though Netflix (NFLX) shares were up 5%, investors were alarmed by downbeat results from IBM (IBM). Big Blue's stock plunged nearly 8% and was one of the biggest drags on the Dow.

Home Depot (HD) also held the Dow back. Shares fell more than 4% following disappointing data about the housing market and worries about rising interest rates. Rival Lowe's (LOW) was down more than 3% as well.

But bank stocks continued to be a bright spot. Wall Street kings Goldman Sachs (GS) and Morgan Stanley (MS) were each up about 3%, a day after both reported solid earnings. JPMorgan Chase (JPM) shares were up more than 1% too.

Investors also may be shifting toward safer stocks in health care and consumer staples that pay nice dividends and could hold up if the economy slows as a result of higher interest rates, rising oil prices and lingering trade concerns with China.

Drug makers Johnson & Johnson (JNJ) and Pfizer (PFE) were each up about 2% and pharmacy giant Walgreens (WBA) rose nearly 1%, McDonald's (MCD) was up nearly 2% too. The fast food giant reports its latest earnings on October 23.

Wednesday's moves follow a wild week for the market. The Dow plunged more than 830 points last Wednesday and lost nearly 550 points more the next day. It then rebounded with an almost 300 point gain Friday. The market was calm Monday but the Dow surged 550 points Tuesday.

So what's next?

Joseph Quinlan, a market strategist with Bank of America's global wealth and investment management unit, wrote Wednesday that the recent volatility isn't worrisome. He said "the current pullback may be more about sector rotation."

In other words, investors are no longer solely infatuated with tech stocks -- and the big FAANG companies in particular. They are now looking more at utilities, energy, banks, consumer staples and healthcare.

A slowdown is not the same thing as a recession

Quinlan argues that "it's too early to call an end to the bull market. This beast is still kicking."

He said that the speed at which bond yields went up recently is what spooked investors. But inflation remains relatively mild and he is not expecting rates to go dramatically higher.

"We think the spike in rates was a one-off," Quinlan wrote, adding that he thinks economic and earnings growth may "moderate in the months ahead, not deteriorate or decelerate sharply."

That's the take of Joseph LaVorgna, chief economist for the Americas at Natixis as well. A slowdown in growth is not the same thing as an actual downturn. And investors may eventually realize that as well.

"Unless an economic recession unfolds over the next year, equity prices are likely to move significantly higher over the immediate term," LaVorgna wrote.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 37210

Reported Deaths: 1495
CountyConfirmedDeaths
Hennepin12048782
Ramsey4777222
Stearns231219
Dakota224890
Anoka2155107
Nobles16616
Olmsted107615
Washington104840
Mower9322
Rice8277
Scott6844
Clay58037
Kandiyohi5661
Wright4535
Blue Earth4422
Todd4002
Carver3611
Lyon3052
Sherburne3035
Freeborn2890
Steele2231
Watonwan2150
Benton2123
St. Louis17415
Martin1615
Nicollet15512
Cottonwood1340
Goodhue1278
Winona12015
Crow Wing10412
Pine1030
Chisago971
Otter Tail921
Le Sueur911
McLeod850
Carlton830
Dodge830
Unassigned8237
Polk812
Chippewa761
Isanti650
Itasca6412
Waseca620
Douglas610
Meeker591
Morrison591
Becker550
Jackson550
Faribault540
Murray540
Sibley532
Pennington510
Mille Lacs342
Brown312
Pipestone311
Wabasha310
Beltrami290
Rock290
Yellow Medicine290
Renville282
Fillmore270
Houston250
Swift211
Norman200
Wilkin203
Redwood170
Wadena150
Aitkin140
Big Stone140
Cass142
Kanabec141
Koochiching141
Marshall120
Grant100
Lincoln100
Pope100
Roseau100
Clearwater70
Mahnomen71
Lake60
Hubbard50
Traverse50
Lac qui Parle40
Stevens40
Red Lake30
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 30173

Reported Deaths: 718
CountyConfirmedDeaths
Polk6275178
Woodbury320144
Black Hawk218058
Buena Vista170511
Linn123882
Johnson12318
Dallas122329
Marshall103519
Story7463
Pottawattamie71911
Scott70410
Wapello70230
Crawford6752
Muscatine62444
Dubuque60922
Sioux4610
Tama45829
Wright3771
Louisa36013
Jasper32117
Plymouth3134
Dickinson2592
Warren2581
Washington2349
Hamilton1871
Webster1702
Boone1421
Cerro Gordo1381
Clarke1272
Clay1270
Allamakee1264
Mahaska11517
Shelby1110
Clinton1041
Poweshiek1048
Pocahontas931
Carroll911
Bremer906
Des Moines862
Henry853
Franklin840
Cedar801
Taylor790
Emmet780
Cherokee751
Monona740
Floyd682
Marion680
Hardin650
Guthrie644
Sac630
Benton621
Jefferson580
Osceola580
Jones560
Harrison530
Humboldt531
Butler522
Buchanan511
Iowa510
Lee502
Monroe506
Hancock490
Calhoun482
Delaware481
Lyon400
Madison402
Clayton393
Davis391
Mills360
Palo Alto360
Winneshiek360
Grundy350
Fayette340
Mitchell340
Kossuth330
Lucas304
Greene280
Howard280
Chickasaw270
Jackson270
Union270
Winnebago270
Ida230
Cass210
Appanoose203
Keokuk201
Page200
Van Buren190
Audubon161
Adair150
Ringgold150
Worth150
Decatur110
Montgomery102
Wayne90
Adams80
Fremont70
Unassigned70
Rochester
Clear
78° wxIcon
Hi: 88° Lo: 67°
Feels Like: 80°
Mason City
Clear
75° wxIcon
Hi: 90° Lo: 67°
Feels Like: 75°
Albert Lea
Clear
81° wxIcon
Hi: 89° Lo: 69°
Feels Like: 84°
Austin
Clear
79° wxIcon
Hi: 90° Lo: 69°
Feels Like: 81°
Charles City
Clear
81° wxIcon
Hi: 90° Lo: 69°
Feels Like: 84°
HOT AND HUMID
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Minnesota baseball players get a sense of normalcy

Image

Sean's 10pm Weather 7/2

Image

Mask Mandate in Cerro Gordo County

Image

Raising Kids to be Tolerant

Image

Student Athlete Speaks Out About Racist Comments

Image

Volunteer of the Month

Image

June Jobs Report Shows Promise

Image

Intermittent Fasting may slow aging process

Image

Extra enforcement to keep boaters safe and sober

Image

All State Award for local VFW

Community Events