Updated for the 4PM closing bell…. Do you call it a crash or do you call it a bear market? Technically this is correction territory now that the 10% pullback has been seen in the Dow Jones Industrial Average and in the S&P 500 Index.
The DJIA (NYSE: DIA) peaked at 12,928.50 this year. The thought that 10% might get shaved off the market seemed unlikely, but that was then…. A DJIA level of 11,635.65 would mark a 10% correction. The DJIA has an unofficial closing bell price of 11,383.83 after a 512-point drop today.
The S&P 500 Index (NYSE: SPY) peak was 1,370.58 and a 10% correction would be at or under 1,233.52. The unofficial closing bell is 1,200.07 after a 60 point drop.
The NASDAQ-100 Index (NASDAQ: QQQ) hit a high of 2,438.44 and the 10% correction would be at or under 2,194.59. The 10% correction has not yet been seen but the NDX dropped 105 points to 2,207.20 today.
The VOLATILITY S&P 500 (VIX) index, or the fear indicator, rose a whopping 33% to 31.19 today and the highest level in the last year has been 31.28.
Blame Europe, blame negative short-term rates, blame Obama and Boehner, blame a pricing-in of a new recession… This is just the market doing what it does. It shakes investors out and prices in lower-growth economies. The beat goes on, and the sun will rise in the east tomorrow even if the July unemployment data turns out to be even more awful than you can imagine.
JON C. OGG