DealBreaker’s John Carney is obviously
worried about the stock market today. At last glance the Dow was down more
than 400 points, with Alcoa and GM both down more than 6%. Nasty, to be sure.
But the Dow, as we all know, is an average, not an index, and doesn’t necessarily
reflect the stock market as a whole. Indeed, today the S&P 500 is actually
doing even worse than the Dow.
But as Carney found out today, the trading curbs on the NYSE are based on the
S&P 500 or on any stock market index: they’re based on the DJIA. Which is
just weird. After all, IBM and Boeing between them account for more than 13%
of the DJIA: if they both plunged in early trade, they could bring the entire
exchange to a halt even if no other company fell a penny. Add in a couple more
companies (Exxon and 3M, say), and you’re already well over 20% of the Dow right
there.
In any case, I’m utterly unworried about this latest stock-market wobble. The
Dow is still well above 13,000, and in fact has never traded this high in its
history except for a brief period earlier this month. I’m sure that there are
going to be all manner of apocalyptic headlines tomorrow morning, but really
this is little more than a bit of long-absent volatility finally finding its
way into the stock market.