JimBowie1958
Old Fogey
- Sep 25, 2011
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U.S. stocks' massive "melt-up" fans investor fears - Yahoo! News
Wow, thats right; people used to do long term investments as a way of raising capital for their businesses.
Man, flash from the past!
NEW YORK (Reuters) - In less than one hour on Tuesday, the U.S. stock market surged by 4 percent -- for no apparent reason.
The last hour of trading was the most volatile final hour in two months -- and it occurred at a speed that frightens many, from experienced hedge-fund managers to mom-and-pop investors.
The late-day "melt-up" that pushed the S&P 500 index <.SPX> out of bear-market territory might be construed as good news. But it brings back echoes of the "flash crash" that saw markets dive by several hundred points in a matter of minutes, and it's a big reason many are staying away from the market.
"Everyone is scared in both ways -- the shorts are scared, the longs are scared, everyone is scared. The high-net-worth investor is very, very scared," said Stephen Solaka, managing partner at Belmont Capital Group in Los Angeles, which manages money for independent wealth advisers and family offices.
Tuesday's move was the latest example of an erratic, high-octane stock market increasingly driven by levered exchange traded funds and complicated hedging and options strategies that unwind with dizzying speed.
It's a far cry from when the U.S. stock market was viewed as a place for capital-raising by businesses seeking to expand and a place for investors looking to put their savings to work.
Wow, thats right; people used to do long term investments as a way of raising capital for their businesses.
Man, flash from the past!