Market review: Week ending Oct. 10
Stocks fell again last week, the third week in row they have done so. The major indices each fell significantly over the course of the week. The Nasdaq took the biggest hit, falling over 4 percent. The S&P 500 fell around 3 percent, placing it about 5 percent from its all-time high. Stocks displayed much higher volatility than they have in recent months, with high trade volumes and large swings. Although the losses are modest when considering the big picture, investors showed great concern due to the higher volatility.
Although economic data from the United States have shown improving economic conditions, investors continue to show concern about foreign economic data. U.S. economic and earnings growth remain positive and jobless claims are at their lowest figure since 2000.
Despite this positive data, evidence of slowing growth in Europe dampened investor outlooks. Industrial output and exports from Germany slowed over the past several months, suggesting that the typically strong economy could slip into recession this year.
The International Monetary Fund lowered their growth forecast due to weakness in Europe, claiming that there is a serious risk of recession in the region.
In addition, the Federal Reserve has also expressed fear that weakness outside of the United States could harm American companies operating globally.
While many are worried by the week’s stock performance, others see the pullback as an opportunity to invest at lower prices. Recently, there have been fewer declines than are typically expected and many investors are not surprised by the week’s loss.