It seems as if nothing will satisfy the markets and exchange traded funds (ETFs) that continue to drop and climb in protest of the credit tightening and housing market slump. Even another cash injection from the Federal Reserve couldn’t smooth out the volatility. The Dow Jones industrial average closed down nearly 170 points and the S&P 500 is down for the year now, according to Madlen Read for the Associated Press.
DIAMONDS Trust, Series 1 (DIA) was down 1.3% for the day and is touching its long-term trend line. SPDRs (SPY) ended the day down 1.4% and is 2.8% below its trend line.
Today the Fed deposited $7 billion into commercial banks in the form of a "repo," which is where it buys securities from dealers and puts the money into the banks. Despite the latest addition, the Fed seems to remain steadfast in its decision not to lower interest rates. Some analysts agree this is in the economy’s best interest, and that the most prudent course of action is to let the market cycle through a correction. The market is almost at the correction point of a 10% drop as the Dow is now more than 8% below its record close.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.