Party on Wall Street (Major gauges surge, tripping circuit breaker)

[tritsofme]

NEW YORK (CNNMoney.com) - Stocks posted one of the best days of the year Thursday, with the Dow Jones industrial average settling above 11,000, after Federal Reserve Chairman Ben Bernanke delivered a non-alarmist speech on inflation, extending a morning rally sparked by tame economic reports.

The Dow Jones Industrial Average (up 219.40 to 11,036.32, Charts) jumped about 1.8 percent, while the broader Standard & Poor's 500 index (up 26.07 to 1,256.11, Charts) advanced 2.1 percent, according to early tallies. The Nasdaq composite (up 58.83 to 2,144.83, Charts) surged 2.8 percent.

The size and breadth of the rally led the New York Stock Exchange to institute a restriction on trading - circuit breakers that prevent the market from rising or falling too much on any given day.

It also led some investors to speculate that stock's long slide over the last several weeks may finally have come to an end.

<SNIP>
http://money.cnn.com/2006/06/15/markets/markets_newyork/index.htm

[garybeck]

1. that's strange, CNN doesn't agree it was a "non-alarmist" speech

main story on CNN.com is how he just announced that inflation is a big concern.

[Kagemusha]

3. Welcome to Fedology. It's just like Kremlinology.

Ultimately these are blips that will balance out in accordance with deeds not words... but that's another day.

[HereSince1628]

2. Yeah it was a great day. Great to see my things green. But . . .

I ain't gonna take off my seat belt yet.

[sinkingfeeling]

4. How can so much depend on people who are either 'spooked' or

'elated' by a few words someone says? I would never invest in these markets....has it all become 'faith-based' now? Why is there no real analysis or goals set?

[Eurobabe]

6. I don't get it either, it is frightening how "news"

moves the markets, rather than fundamentals.

[A HERETIC I AM]

8. The news affects the fundamentals in many ways.

If the Fed Chairman says he thinks inflation is too high, it raises concerns about what they will do with interest rates and this has an effect on investor decisions.

News of heavy rains in the Midwest has an effect on grain harvests, news of a frost in Florida in the winter has an effect on oranges, etc. etc. etc.

[sinkingfeeling]

10. To me, it's a stupid way to attempt to make money rather than by producing

anything. Kind of like betting at a race track or buying lottery tickets. I don't see much difference in any of those.

[A HERETIC I AM]

12. The financial markets provide financing for virtually everything

Buying a stock or a bond isnt "Betting" any more than typing on a message board is "literature". (But i'll admit there are the rare cases where they can be)

If it wasnt for stocks and bonds (and the rest of the massive financial market as a whole) you wouldnt have that computer you are typing on, the power grid that carried the electricity to it, the pavement on the street outside, your local hospital or school, the nearest factory, the building you work in or just about anything else in this modern world. Damned few capitol improvements are created because someone saved up enough to finally pay for them. Did you scrimp and save and pay for your house or your car in cash? If you did, you are a rarity. Municipalities, companies, international corporations and governments use the markets to finance themselves the world over. And it has been going on this way for hundreds if not thousands of years to one extent or another.

I am sorry to say, but it seems your point of view in this matter is skewed towards the uninformed.

[sinkingfeeling]

15. I will grant you that bonds are used by municipalities and governments

to get financing and stocks are sold by corporations so has to have funds. What I see, that has changed dramatically in the last 30 or 40 years, is the speculation that drives the markets today. The participants used to be the very wealthy, grounded, in-for-the-long-haul types...today, with day traders and brokers, raking in their fees on each transaction, turning over the same stock a dozen times in a day, are more into speculation and 'quick' profits then into stable investments.

[VegasWolf]

17. Unfortunately, those days are long gone. Remember when Fort Knox

actually had gold in it, rather than the military training post it is now known for? Remember when corporations had retirement plans?

[high density]

19. Speculation indeed

It kind of bugs me that everybody calls people who play in the stock market "investors" when most of them are really "speculators."

[VegasWolf]

20. Speculators don't last long. Most market players are traders. There

is a lot of math behind the "speculation", exponential moving averages, Fibonacci ladders, Fourier transforms to smooth noise, Bollinger channels with standard deviations, etc. It is a lot of work and requires a lot of knowledge to succeed. "Speculators" don't last.

[nick303]

23. When it comes to institutional investors

it is the job of the so-called "sell side" firms to trade as often and at as a low cost as possible. Their purpose is not to invest but to provide liquidity. Many buy-side firms still have a long-term investment philosophy, hedge funds being one possible exception.

When it comes to individuals, there are short-term speculators, and some of them might even do pretty well. They are in the minority. Most individuals are still best served by the long term, buy and hold strategy.

[w4rma]

16. It's more like buying, trading and selling baseball cards, imho. (nt)

[nick303]

22. I felt that way at one point

Of course, that was before I understood how any of it worked.

[A HERETIC I AM]

9. "Why is there no real analysis or goals set"

You might be astounded to know that there are literally tens of thousands of analysts around the world that do nothing but watch the news, research what happens as a result, analyze what happened before to similar news and set goals as a result EVERY DAY.

The world financial markets are so complex it is mind boggling.

[Jackpine Radical]

13. There is no solid analysis because anyone who does it

will stay out of the market. P/e ratios, responses to Fed debt, etc. appear quite irrational. Jackpine's Law states, "When the market is acting crazy, only crazy people will be in it."

[The_Casual_Observer]

5. Another 400 pts and I'm out.

[yellowcanine]

7. Well we are ALMOST up to where it closed in August 2000

11,215.10

[Igel]

26. And it shouldn't have been there. n/t

[daleo]

11. I think this is an overcorrection of the last overcorrection

Which was, of course, an overcorrection of the previous overcorrection.

[VegasWolf]

14. It's odd, usually stocks rise at a slower rate than they fall because

gut wrenching fear is a more powerful motivator than greed. Here we have seen a consistent slow slide marked by quick pops to the upside. Gives me deja vu to the 2000 crash market. Oh well, I still remember how to buy long temporarily! :)

[Dogmudgeon]

18. Sounds like "Pump and Dump" at work

They Pump, then they Dump. They Pump, then they Dump. Pump. And Dump. Pump and Dump. Pump and Dump. Pump and Dump and Pump and Dump and Pump and Dump and Pump and Dump ...

So we'll oscillate between 9000 and 12000 DJIA until Something Happens. And when Something Happens, it won't be good for those of us who don't have lots of money to play with in the financial markets.

It happens in every exhaustion phase. Then a recession sets in for a while. It will happen again.

--p!

[VegasWolf]

21. It really does not take all that much money, you can use margins. It

does take a ton of study, a lot of practice, and perseverance though not to lose everything you have!

[pretzel4gore]

24. no one mentioned the Plunge Protection Team

(they're part of the Bush Protection Team).....maybe with the US national debt going towards (??) trillion $ and a lunatic running the country it's kryptonite in reverse, with meester boosh sooperman(??)
thank god for global warming :)

http://www.thisislondon.co.uk/news/business/articles/timid60605?version=1

[nick303]

25. It's amazing

I am currently assigned to a trading desk at a bulge-bracket IB, where market makers in several big-cap stocks work. They haven't ever mentioned the plunge protection team either! This must be the biggest conspiracy ever!

[pretzel4gore]

27. ever heard of the Downing Street Minutes?

basically, what the DSM say is that the political leadership decided in '02 to con the people of usa/britain etc, to get them to comply with an illegal takeover of iraq.......the PPT is secret, because it has a quasi legal/moral purpose (to prevent a meltdown of markets if news is bad etc)
didya know the nyse was recently sold to a private company, after 230 years as a public service?
didya know the bush government hss stopped revealing how much cash the mint was printing?
or in 2002 congressional election 3 gopigs won the contest by exactly 18181 votes....not 18180, or 18182, but 18181 ...aint that amazing?
bush and the gopigs are criminals. it's THE biggest conspiracy eveh.....

[nick303]

28. Some fundamental misconceptions in your post

didya know the nyse was recently sold to a private company, after 230 years as a public service?

There is nothing accurate in this question you pose.

For the last 213 years the NYSE was a private, member-owned institution. You could only have a piece of it by buying a seat on it, which these days is in the millions of dollars.

What NYSE did do was hold an initial public offering. They are now a for-profit institution. You can buy a share of it yourself, under symbol NYX. (And yes, the NYSE Group stock is traded on the exchange itself).

didya know the bush government hss stopped revealing how much cash the mint was printing

1) What you are alleging is not really a function of the "bush government" per se, but of the Federal Reserve. The Federal Reserve cycle is staggered such that a given Fed chair will not be beholden to a given president.

2) When it comes to causing or preventing monetary turmoil, your concern should be with the Federal Reserve, and the standard methods they use to control the money supply (setting bank reserve requirements, open market operations, setting the discount rate). Don't get too worried about the US Mint, or the US Treasury for that matter.

3) They didn't stop reporting how much "cash was printed". The M3 measure of the money supply is no longer reported, due to a belief held by many that M3 often correlated with M2 and provided no valuable information above what M2 provides. For all the allegations I've seen, I have yet to see a clear demonstration of money measured in M3 but not in M2 could be used to cause chaos.

I don't really see what the DSM has to do with this.

[pretzel4gore]

31. i guess it matters....but the basic premise remains, and unaffected

even while posting that diatribe, i knew it was invalid as anything more then a commentary on the trustworthiness of the busheviks and the endless WELL CRAFTED very well researched LIES that are the fuel powering bush and his gopigs, especially the mediawhores, so if the aspersions cast at them pig bastards doesn't hold water, who cares? honestly, i simply have no interest in M3 or the nyse, or even the nat debt etc, beyond what i also have in the local bakery (ie there's no dead rats mixed in the dough etc) and the fact remains, astonishingly under appreciated, that bush is a stone killer, a professional political criminal who has been getting away with murder for many years; and that doesn't alarm anyone (?) beyond a few people who, for the most part, are not that interested in the system enough to craft criticism for its improvement; which might/might not, be good idear. fukk the system, i say (but again, 9 outta 10 people are innocent of any wrong, and the animals(?) well there is plenty worth fighting for...)

[A HERETIC I AM]

29. As a minor point of order.....

the US Mints do NOT print currency. The Bureau of Printing and Engraving does. Mints mint coins and there are several. There is only one BPE and it is in DC. I took a tour of the place on a field trip in Elementary school.

[PassingFair]

30. You can't see the forest with all those trees in your way.

and they MAY be slipping a little koolaid into your coffee.