Dow Falls Below 10,000 As 'Sell The News' Prevails

NEW YORK (TheStreet) -- The Dow fell below 10,000, and the major averages retreated Friday, as better than expected data and earnings from Microsoft(MSFT Quote) and Amazon(AMZN Quote) did little for other stocks in a "sell the news" environment.

The Dow Jones Industrial Average fell 109.13 points, or 1.1%, to 9,972.18, while the S&P 500 gave up 13.31 points, or 1.2%, to 1079.60. The Nasdaq edged down 10.82 points, or 0.5%, to 2154.47.

Microsoft and Amazon shares were higher by 5.6% and 26.7%, respectively, after topping estimates and after multiple upgrades to the latter -- but it had little effect on the broader markets.

"We're getting to the end of the biggest week of earnings so far this earnings season, and with the exception of a few stellar performers, people are selling the good news," says Michael James, managing director at Wedbush Morgan Securities. "The prevailing theme is that people were expecting good numbers this quarter, and as we've been getting them people are selling into the strength."

"people are selling into the strength"

This is a little like the AGW/Climate Change bunk - it's getting warmer, so it must be global warming. It's getting colder, so it must be global warming.

In this instance, the market is going up, so it must mean the economy is strengthening. The market is going down, so it must mean the economy is strengthening.

It's a very convenient strategy - for both camps.

We will have about 40 to 60 days of an up and down market as the USD has its last rally before a slide.

watch for the dollar to start devolving, and them buy in when stocks are low. Buy commodity based stock, something that has value independent of what the USD does.

The money keeps getting printed. Wheeeeeeeee!

Stock Market Rally Provides Investors An Incredible Opportunity To Sell Into Strength

Stock-Markets / Stocks Bear Market
Oct 23, 2009 - 12:58 PM
By: Chris_Galakoutis

Curtain Call for Inflationary Run - The collapse of 2008 occurred because the US was clearly on an unsustainable path of excessive consumption and speculation, financed by credit.
Debts are IOU’s with repayment terms, which means debtors must pay interest to creditors; borrowers therefore are on the hook for the principle as well as the interest, and the whole system falls apart when debtors are unable to pay because they 1) don’t produce anything, or 2) are denied new credit that becomes scarce when booms turn to bust.

Borrowing to consume is debt that is of the non self-liquidating type, an issue we have regularly written about.
As it turns out, this type of borrowing was not limited to the know-nothing consumer and his get-rich-quick schemes this past decade, but government and corporations as well, who, one might think, should know better.
The US economy is largely dependent on debt and smooth running credit markets.
In the years leading-up to the collapse of 2008, large US corporations -- many not in the ‘finance’ business but rather industrial type companies -- greedily created finance arms to get a cut of the huge profits being generated by shuffling paper within the ballooning debt bubble.

In fact, with a large portion of corporate activity today centered around finance rather than production, it is easy to see how so many companies ended up getting into trouble; much of this debt bubble was based on mortgage loan origination -- loans based on home values that were too high and headed for collapse, held by consumers who couldn’t afford to make mortgage payments at the first sign of trouble.

[snip]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.