Friday’s selling spree wiped out any gains made in July for both the Dow and the Nasdaq.
Investors are taken by fear and worry over the European financial position according to Frank Fantozzi, president and senior adviser at Planned Financial Services.
See U.S. stocks fall as Europe fear overrides earnings – MarketWatch.
As an investor myself, I know for a fact that this economy is run by perception that people have at any given time. You can also call it faith. What people believe is what they push into stock prices. The more the fear, the more the Dow jones goes down, the more companies stop hiring causing job growth to stagnate. I saw false rumours of a buyout of RIM (maker of the Blackberry) occur 4 times in the last 12 months. Each time it pushed the stock price up before coming down.
Bottom line, fear whether real or not, as long as investors feel it, will cause them to crash the banks and the market. We need more investors to be bullish and start having the guts to hold on to thier investments rather than sell in a panic and ride the cycle of fear.