Wednesday, July 24, 2002
Tuesday was the third busiest trading day ever on the New York Stock Exchange.
LOS ANGELES TIMES
Volatility kept its hold on Wall Street today, sending prices fluctuating in early trading. The Dow Jones industrials, trying to end a four-session losing streak, swung between triple-digit losses and gains.
Investors were torn between buying on respectable earnings reports, and selling on Wall Street's inability to break out of a losing cycle that is now more than nine weeks old.
At midmorning, the Dow was up 104.81, or 1.3 percent, at 7,807.15 after falling nearly 170 points in early trading.
The Nasdaq composite index rose 2.06, or 0.2 percent to 1,231.11. The Standard & amp; Poor's 500 index rose 2.99. or 0.4 percent, to 800.69.
Stocks slumped Tuesday in another wild session, as a key measure of the market's fear level soared to levels last seen during the crash of 1987.
After several rally attempts collapsed Tuesday, the Standard & amp; Poor's 500 ended with a loss of 22.15 points, or 2.7 percent, at 797.70, leaving the blue-chip index about 10 points away from marking the worst bear-market percentage decline since the Great Depression.
The Dow Jones industrial average lost 82.24 points, or 1.1 percent, to 7,702.34. The NASDAQ composite index dropped 53.60 points, or 4.2 percent, to 1,229.05 as tech stocks helped pace the day's decline.
Breadth was abysmal, as losers swamped winners by more than 4-1 on the New York Stock Exchange and by more than 3-1 on Nasdaq. Trading volume was heavy, with the NYSE recording its third-busiest day ever.
Once again there were few places to hide as investors dumped stocks across all size ranges and most industry sectors: The mid-cap S & amp;P 400 and the Russell 2,000 index of smaller stocks fell through their September lows, losing 3 percent and 4.1 percent, respectively.
Has market bottomed out?
The widely watched VIX, an index that measures expected volatility in S & amp;P 100 "put" and "call" options traded on the Chicago Board Options Exchange, soared to 50.5, topping the closing peak of 49 reached after the Sept. 11 terrorist attacks.
Like many other measures of market sentiment, the VIX appears to be indicating that the 28-month-long bear market is nearing an end, some say: Bear markets usually bottom when fear levels are highest.
Yet several technical analysts said this week's VIX spike is far from a convincing sign of a market bottom. There is still too much investor complacency for their contrarian tastes.
"It's an eyebrow-raiser and it's something to watch, but it's not a 'Eureka!,' " said John McGinley, editor of Technical Trends newsletter in Wilton, Conn. "Psychologically speaking, we've got to get to the point where people are saying they would never invest again. We've got to completely wash out the bull case."
Chris Johnson, analyst at Schaeffer's Investment Research in Cincinnati, agreed: "So far the VIX is bullish fodder that may bring in some buyers, particularly if we see higher spikes in the next few days. But it doesn't represent exhaustion of the selling."
Paul Rabbitt, portfolio manager at Rabbitt Capital in Hermosa Beach, Calif., said that although previous VIX spikes have marked at least near-term bottoms, corporate accounting scandals have created a different climate in this sell-off.
XThe Associated Press contributed to this report.