SO AT THE OFFICE TODAY I kept half an eye on the stock market, watching as it went down, and then up a bit, and then down a lot more. About three o'clock, as the market was on yet another downward spiral, I stopped looking at it entirely and figured we'd all get whipsawed again. Fast forward a bit, and I was deeply involved in my work when one of my colleagues exclaimed, "It's up!" Naturally, I was stunned at this -- although perhaps I shouldn't have been -- and opened up my Web browser. Sure enough, there it was -- a teeny gain in the Dow Jones, plus a somewhat nicer gain in the S&P 500. When the tickers finished adding up the numbers, the Dow ended essentially flat for the day.
Well, as you can imagine, I thought this was rather nice. The only trouble with this equation, though, is that the Dow is an extraordinarily narrow gauge, with just 30 total listings. The entirety of the New York Stock Exchange has more than 3,300. The NASDAQ has more than 3,200 listings and the AMEX has close to 1,400. Even the over-the-counter stock listings -- which range from crap penny stocks to banks and various foreign companies -- number more than 2,000. What did we see on these?
As it turns out, Yahoo! Finance -- an excellent business site, actually -- has a full listing of "advancers and decliners," which show just how all those equities did in the aggregate. On the NYSE, decliners beat advancers by a 6-4 ratio; on the NASDAQ, decliners beat advancers by a 54-43 margin. The AMEX really had a bad day, with declining issues outnumbering advancing issues by a 3 to 1 margin. Perhaps most telling was the ratio of stocks which hit new yearly highs compared to those that hit new yearly lows -- on the NYSE, new lows outpaced new highs by 100 to 1!
I do think people -- and especially journalists -- pay far too much attention to the Dow Jones Industrials. Perhaps it's because it's an easy benchmark and all the companies are downright huge; but most people, especially those who own any sort of mutual fund, need to look deeper to get a handle on how things are going. Bookmark that Yahoo page and check it frequently; I think you'll find it worthwhile.
Speaking of which, the Asian markets are DOWN AGAIN right now, after getting their heads handed to them the day before. For more on this, take a look at The Telegraph's business pages, which being at the center of the financial universe do a much better job at covering European and Asian markets than pretty much all of the American press, even if they are a bit more, ah, emotional about it. Ambrose Evans-Pritchard -- a favorite here at The Rant -- has filed reports on the latest market mayhem and the apparent unwinding of the yen carry trade. (Not. Good.) Oh, here's another AEP story on the Fed's recent actions.
The Telegraph's James Quinn also has a story on how the hedge funds have been doing. They have taken more than a trim, Mr Quinn writes.Posted by Benjamin Kepple at August 16, 2007 09:55 PM | TrackBack