Stocks are getting hammered.
At one point on Wednesday the Dow was off 550 points as each of the major US stock indexes fell by more than 3%.
Near 1:45 p.m. ET, markets had somewhat recovered but were still getting buried.
In an afternoon email, Rich Barry at the NYSE summed up what’s going on down on the floor of the stock exchange, and his simple explanation is that on Wall Street you get people selling stocks for two reasons: intellectual and non-intellectual.
Effectively, good reasons and bad. And right now, only the bad stuff is happening.
Here’s Barry (emphasis ours):
We can’t sugarcoat it — it is ugly out there. How ugly? Well, for one, both the Dow and the S&P 500 are down 11% on the year so far. In fact, at last look the S&P has lost $2 trillion(!) in market value for 2016, and has now suffered its worst monthly point decline — ever… There’s an old saw on Wall Street, that there’s two types of selling: intellectual and non-intellectual. Intellectual selling is where you don’t like a stock because you don’t like the earnings prospects, or the economic prospects. Non-intellectual selling is when you are being forced to sell when you don’t want to. We seem to have entered the non-intellectual part of the selloff. To this point, one rumour making the rounds today is that a lot of the pressure on the market today is being caused by sovereign wealth funds that are being forced to liquidate positions. Also hearing some speculation that the Fed’s next move might be QE4!? Sooner or later, calmer heads will prevail. Keep the faith…