Talk about a disappointment. The Dow moved over 400 points in about 5 minutes into the close.
This is not easy to sort out, but most traders put the bulk of the blame for the sell-off on purported comments from General Electric(our parent network) CEO Jeff Immelt that he wants to keep 2009 profit expectations even if revenues fall 10 to 15 percent. The market took this as no growth.
However, GE Corporate Communications has told us that Mr. Immelt's comments were taken out of context, and he is not making any new forecasts.
And, before you blame GE for the selloff, consider this: traders tell me that 500,000 S&P 500 E-mini futures contracts traded from 3:45 to 4:05 PM ET. That is about $23 billion, or 15 percent of the total volume of E-minis traded all day.
It is somewhat unlikely that that much money would trade on a single headline, even if it is GE.
That makes it more likely that this was a repeat of Monday's performance, where the Dow dropped 250 points in the last few minutes on no real news.
- Read Text of Fed's Statement
- Cut Has Limited Impact on Stocks
- Gross: Rates to Remain Steady
This smelled of someone dumping stocks in a big way, taking advantage of the modest gains from yesterday, which has become a distressingly similar story.
The GE reported comments may have added some fuel to the fire, but something else was likely going on.
- Fed Cuts Rates Half Point To Lowest Level in 4 Years
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