Today the market was like a yo-yo. It went up then down then up then down and the S&P and DOW ended up. However, the Russel 2000 index of small stocks was down for the day. The concern by investors is likely that smaller less capitalized companies may have fewer resources to withstand a deep recession and limited capital raising opportunities. The volatility in the markets is certainly increasing investor stress and most people will be happy when Friday is over.
Many more companies reported earnings today with few upside surprises and many warnings of difficult times ahead. The sectors that seemed to have the most losers today were home building, gaming, airlines, auto parts and wireless. A weakening consumer will definitely hurt these industries.
The Asian markets are down 3-7% overnight and will likely set a negative tone for trading in the United States. Take a deep breadth. This is a long race. As stocks decline, the opportunity only gets better as long as you maintain liquidity and invest in high quality stocks.
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