Stocks struggle to tread water
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The stock market is trying mightily this morning to hold on to its gains from the past two days.
The Dow industrials were off about 50 points at midday, an unsurprising pullback given that the Dow jumped almost 900 points cumulatively on Friday and Monday -- its best two-day showing since the aftermath of the October 1987 market crash.
The key is whether the market can hang onto most of that, an encouraging sign that would go far toward shoring up investor confidence.
The market has undergone several powerful rallies in the last two months only to fall back each time.
“You want to see the market in a few days acting more resilient,” said Steven Goldman, chief market strategist at Weedon & Co. “Hopefully we can trade sideways for a couple of months.”
The day began hopefully as stocks climbed in the first hour of trading after the Federal Reserve unveiled its latest moves to spur the economy –- purchasing $600 billion in housing-related debt to boost the mortgage market and earmarking another $200 billion for consumer loans.
The Dow rose almost 165 points, but sagged and was down more than 150 points before clawing its way back.
The market’s resilience is impressive given that it’s battling another tide of bad economic news.
The economy shrank 0.5% in the third quarter, the Commerce Department reported. And home prices fell 17.4% in September from a year earlier, according to the S&P/Case-Shiller home-price index.
No one expects the start of another bull market. But a flattening out of stock prices would be more than enough to give thanks for at this point.
-- Walter Hamilton