Be that as it may, the good news is that Dow has yo-yoed back to green territory in its last trading session. But in initial trade it zoomed 145 points higher than previous close, on the back of some good manufacturing numbers. To be precise the ISM index rose to 55.7% in October, up from 52.6% in September. This is also its highest reading since April 2006 which was cheered so merrily by the street that it seemed as if Dow was determined to break some kind of record in single-day gains. If you ask me, personally I was of the opinion that Dow was properly geared to gain at least 250 points yesterday. That's how it seemed in early trade on 02 Nov 2009. But alas!
By midday one found Dow languishing 35 points down, having given up all of its 145 points gain. That in effect was an intra-day loss of 180 points from its high. What spooked Dow were the Financials, Tech and Energy stocks. Investors got so nervous that all good news and reassuring signs of recovery from manufacturing data were brushed under the carpet and selling again took center-stage.
However Dow did recover some of its lost ground and thankfully so for health of Asian markets today. The recovery was witnessed both in Financials and Tech stocks. Somehow I fail to understand as to how anyone can possibly be selling Tech stocks like Apple at this point in time. With Christmas around the corner, Apple is likely to have a strong sales season of Mac computers and iPhones. But then that's how markets are!
As for Financials, I guess US market participants did not like a key Federal Reserve official saying all that he said about executive pay in large financial institutions. I have a hunch that big boys on the street didn't like that one single bit. How can you even hint that a substantial portion of executives' pay (incentive-compensation) in big banks should be deferred over a multi-year period? So what if they have turned around with massive help from tax-payers' money!!
But somehow Dow in late trade yesterday made a nice effort to claw back into green. That is leadership, because now the Asian markets will follow suit. Indian markets should open with a gap up and sustain their rally today.