A stock drop is never reassuring — except when it could have been worse. The Dow shed 115 points, or 1.5 percent on Tuesday. But it also held onto 382 of the 498 points it racked up a day earlier.
NEW YORK (AP) — A stock drop is never reassuring — except when it could have been worse.
The Dow Jones industrial average shed 115 points, or 1.5 percent on Tuesday. But it also held onto 382 of the 498 points it racked up a day earlier.
Anyone with a 401(k) would have liked to see the rally continue. Market analysts said, though, that a pullback was expected given the massive gains Wall Street logged the day before when the government released plans lift bad loans off banks’ books.
“We’ll take that trading pattern any time,” said Arthur Hogan, chief market analyst at Jefferies & Co. He said he came into work anticipating the Dow to drop between 1 to 2 percent Tuesday after its 6.8 percent jump Monday.
Furthermore, the Dow was up more than 1,000 points from hitting nearly 12-year lows on March 9, and there was little in a way of positive economic or corporate data Tuesday to lift stocks further.
If Wall Street gets more good news, stocks could resume their rise. But if it doesn’t, the rest of Monday’s rally – and then some – could get wiped out. Later this week, investors will be facing some big economic reports: durable goods for February, a revised fourth-quarter gross domestic product number, and personal income and spending for February. And next month, first-quarter earnings reports start pouring in.
Thomas J. Lee, a stock market analyst at JPMorgan, said the market’s ability to hang onto most of its rally was encouraging, but “this has definitely been a show-me market.”
According to preliminary calculations, the Dow fell 115.49, or 1.5 percent, to 7,660.37. The Standard & Poor’s 500 index fell 16.55 points, or 2 percent, to 806.37. The Nasdaq fell 37.11 points, or 2.4 percent, to 1,518.66.