I dont get it - stock market

[tontod]

The stock market seems to be pretty screwed up lately. Intel comes out with a profit warning, the market tanks, everyone thinks the chip sector is doing badly. A few days later Motorola does the same thing, market tanks again, people(or analysts) think the chip industry is doing bad and is an indication of the market. Seems like there is too much focus on the negative. No matter what major company announces profit warnings, that industry gets slammed.

 

[d0ofy]

It's because those profit warnings are the real deal and what's probably going to happen. Why would you want to invest when the company you're investing in says their going to lose? Do you like betting on losing sports teams?

 

[tontod]

Yeah, but why does the whole industry and the market in general get slammed? It should just be that company's stock, maybe just a little bit of a ripple effect into the market but not in a major way like it seems to happen.

Edit: For example, Nokia announced less than stellar results. And the market takes a nosedive. They certainly arent the only wireless company. There are others - Motorola, Lucent, Ericcson, etc.

 

[Helpless]

the sum of the parts is equal to the whole or, guilt by association

 

[Looney]

Ripple effect... if a major player like Intel is being affected (good or bad), it's going to affect the smaller companies. Also, it's indicative of the industry as a whole as well.

 

[Pliablemoose]

The market is driven by both logic & crowd psychology, just when you've got one figured out the other kicks in.

Unless you're really into it (and pain lately) an indexed fund is the way to go...

 

[mk52]

we are in the middle of warning season, what do you expect.
nokia warned ths morning and the whole telecom sector got whacked, hehe ericsson down to 5.
Gotta love it when the market goes down

-MeliK