Well, that was quick.
If traders needed a reminder what real stock-market volatility looked like, or how quickly two-plus weeks of grinding gains can be evaporated, Friday was the perfect day.
When the dust had cleared, the Dow Jones Industrial Average plunged 166 points to 11,824, the Nasdaq fell 2.5% to 2687, and the S&P 500 was off 1.8% to 1276. The S&P 500 found itself closing at a level where it had first ended on Jan. 5, and has now essentially cut in half its gain for the month and year.
At least the Nasdaq had a specific stimulus — a weak earnings report by Amazon.com (NASDAQ:AMZN) late Thursday, which included a miss on fourth-quarter revenue and drastically lower forecast for first-quarter operating profit, put traders on alert that it could be a rough session for tech stocks.
Still, to the general investor there was reason for optimism: the Nasdaq had returned to its old outperforming ways for much of this week, so a day off wasn’t necessarily cause for alarm for the broader market. Plus, both the Dow and S&P 500 were flirting with big, round numbers to attain (12,000 and 1300) that seemed within reach — especially on a Friday, with nothing but recent bullish momentum at play.
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NB: TWO trading days b4 cny 2011!
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