Understanding the stock market roller coaster - KWWL - Eastern Iowa Breaking News, Weather, Closings

Understanding the stock market roller coaster

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DUBUQUE (KWWL) -- Thursday people across the world saw the effects one country's economy can have on the stock market. May 6th, 2010 financial analysts across the country saw drastic changes in the stock market.

"The market sold of about 200 or 300 on the DOW. And literally in a matter of minutes we drooped from 300 to 1000," said American Trust Chief Information Officer, Mark Stevens.

With the US economy in the early stages of recovery, a drop that significant, makes a difference. Stevens says Thursday's market drop had do with one of two things.

"Rumored that a major trading error where somebody meant to share millions of shares and actually typed billions of shares and it actually moved the market down," said Stevens.

Which takes most of us back to basic economics. When you have more to sell than to buy, the market does go down mostly out of fear.

"Literally that market snapped back within minutes back to where the levels were at before that happened. So a lot of times obviously creates more fear, even though its manufacture," said Stevens.

But what's not manufactured is the second possible cause in a quick drop: Greece. The countries economy is falling; currently dealing with more debt than profit.

"I think the concern is all these issues that need to be resolved, how will that effect global growth," said Stevens.

Especially when the US economy is just starting to recover from a recession. Steven says Thursdays market is a reflection of just how fast things can change.

"In the end it will effect global growth and in the end effecting us as well," said Stevens.

Stevens reminds us that the market is up 60 percent from last year. So a large drop like yesterday will get a lot of attention, which can sometimes cause people to act based on fear.

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