This month could be the slowest in three years, with daily volume on the New York Stock Exchange down 22%, compared to one year ago, reports Chip Cutter for the Associated Press. Low stock trading volume indicates that there are less investors driving the market’s gains and losses. The risk for bigger price swings becomes larger.
“Volume in many respects represents conviction,” says Jack Ablin, chief investment officer at Harris Private Bank, in the report. “And there’s just very little conviction.”
Factors that are influencing traders to migrate away from stocks include a weaker job growth picture, a manufacturing slump, and the ongoing debt problems in the U.S. and Europe.
Some say the lack of volume also indicates that investors simply don’t believe that stocks are worth buying right now.
Tisha Guerrero contributed to this article.