Little Guy Isn't Doing Big Selling
By Yi Ping Ho Staff Reporter 09/21/2001 08:58 AM EDT
Waves of selling keep crashing into the U.S. equity markets, sending stocks lower. Who's behind them?
U.S. stocks are off more than 10% since the terrorist strikes last Tuesday, and confidence in the world's financial powerhouse has been shaken. Market strategists, economists, and money managers say the selling is, broadly speaking, coming from everywhere. But some forces more than others are at work to drive the stock market lower.
"Obviously a lot of managed money is leaning on this quite heavily," said Jeff Hall, economist at IRF/Thomson Financial. Hall said the runup in the short end of the Treasury market suggests that many are placing bets on the safer and more liquid assets of short-term bonds. David Greenlaw, chief U.S. fixed-income economist at Morgan Stanley, agreed. The economist said one sign of the flight from stocks into short-term debt is the steeper Treasury yield curve, which tracks the difference in yields between short-term and long-term securities.
Cash has also become a safe alternative, said Maryann Hurley, Treasury market strategist at D.A. Davidson. "I'm hearing bank deposits are just bulging."
John Bollinger, president of EquityTrader.com, pointed out there have been large numbers of block trades on the New York Stock Exchange since Monday. "This to me says that a lot of professionals, fund managers, hedge fund operators and proprietary traders have been very active on the sell side. It's my sense that individuals are not as panicked."
[Full text: http://www.thestreet.com/markets/yipingho/10001357.html]
Carl
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