Update: After a day of volatile trading, the stock market closed with the Dow Jones Industrial Average down 520 points, a drop of 4.7 percent. That follows a 630-point drop Monday and a 430-point gain Tuesday, and USA Today reports that "High-speed computerized trading, called high-frequency trading, is exacerbating the market's big swings." The Wall Street Journal tied the sell-off to the Federal Reserve's admission that it doesn't expect the economy to get much better in the next year, plus worries over the health of European banks. The S&P 500 fell 4.4 percent, or 52 points, and the Nasdaq lost 4.1 percent, or 101 points.
Despite the riptide rides the market has taken over the past two weeks, investment pros aren't running for the exits. ... Evidence that the stock landslide hasn't chased many investors to the sidelines comes from the Investors Intelligence survey, which checks newsletters from market pros across the country to see which way they are titling....In times of aggressive market selloffs there's a need for capitulation -- or the point when the final stragglers who don’t believe in the drop finally get out. That marks a turning point where the market can gain.But with the Investors Intelligence spread far from normal levels associated with a bottom, that could spell trouble for the already-volatile market.
This article is from the archive of our partner The Wire.