Traders work on the floor of the New York Stock Exchange Wednesday, March 16The Associated Press
It is amazing how the unusual is becoming the norm these days. The Dow Jones industrial average was down 2.6 per cent in midday trading, but the downturn is hardly eye-popping; there have been nine other days within the past six months when the blue-chip index has fallen 2.5 per cent or more.
The downturn was also broad, hitting all 30 stocks within the index and 489 stocks within the broader S&P 500. That conforms to what Bespoke Investment Group calls an "all or nothing" day, when 400 stocks within the broad index either rise or fall on a given day. As of last Wednesday, Bespoke had counted 59 such days this year, a record number.
Meanwhile, other assets are lining up the way they usually do on such tumultuous days. Gold, which some investors believe is a haven investment, fell to $1,685 (U.S.) an ounce, down $39. It is now at a one-month low and down more than 11 per cent since September. Gold stocks are doing even worse. The NYSE Gold Bugs index fell 3 per cent on Monday, marking four straight down days. The index is off more than 15 per cent since September.
The gains come as investors once again flee to U.S. government bonds – yes, despite concerns that bickering in Washington has again pretty much ruined any chance of an agreement over a deficit-cutting plan. The yield on the 10-year Treasury slipped to 1.97 per cent, close to a six-week low.
The U.S. dollar is also seeing gains. The dollar index, which measures the currency against a basket of others, rose to 78.3, close to a six-week high. On the other hand, the Canadian dollar has slumped to 96.3 cents against the U.S. dollar, hitting a six-week low.
Yup, just another day.
David Berman