Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How Irrationality Has Sparked the Dow Jones Industrial Average (.DJI)’s Triple-Digit Plunge

Page 1 of 2

Down go the markets on renewed fears over an end to quantitative easing. The Dow Jones Industrial Average (INDEXDJX:.DJI) has fallen sharply, diving 120 points, or 0.78%, as of 2:25 p.m. EDT. Most stocks are in the red, but today’s dip is a reminder that easing has to end sometime — although Wall Street has yet to accept that truth. Here are the stories you need to know about on the Dow Jones Industrial Average (INDEXDJX:.DJI)’s down day.

Dow Jones Industrial Average 2 Minute (INDEXDJX:^DJI)

Volatility takes the day
The CBOE Volatility Index, or the market’s “fear gauge,” has shot up 5.4% today as part of a nearly 27% run-up over the past month. While Federal Reserve chairman Ben Bernanke has warned that slowing quantitative easing could slow down the economy’s recovery, investors shouldn’t panic over a draw-down of bond-buying. The Fed can’t keep up stimulus forever, and while easing has helped some sectors of the economy regain their footing, eventually “QE infinity” will have to come to end. Prepare for more volatility ahead as Wall Street comes to grips with that eventuality, but don’t panic and divert from long-term goals. The central bank won’t jerk stimulus out from under the feet of the economy, but rather taper it off over time. That’s nothing to fear.

Those knee-jerk sentiments from Wall Street have sent The Home Depot, Inc. (NYSE:HD) shares plummeting 2.6% today. No doubt stimulus has played a part in housing’s rebound from its recession lows, but The Home Depot, Inc. (NYSE:HD) has performed well for investors lately. The company’s standout first-quarter earnings and optimistic outlook for full-year profit are good signs for this stock’s future, and so long as housing continues to tick up, there’s no reason to doubt The Home Depot, Inc. (NYSE:HD) now.

International Business Machines Corp. (NYSE:IBM) shares have also fallen to the bottom of the Dow Jones Industrial Average (INDEXDJX:.DJI) today, down 1.6%. The firm purchased cloud-computing company SoftLayer today in what is reportedly a $2 billion deal. Cloud computing has taken off recently, and International Business Machines Corp. (NYSE:IBM)’s purchase should further cement Big Blue as a key player in this growing industry., Inc. (NASDAQ:AMZN) has already thrived on the back of the cloud-computing industry by offering public clouds to smaller and midsized businesses, but International Business Machines Corp. (NYSE:IBM) could use its own public clouds to offer its services to corporate customers.

Fortunately, a few Dow Jones Industrial Average (INDEXDJX:.DJI) members are beating the pack today, and Merck & Co., Inc. (NYSE:MRK) leads the index with a 2.9% gain.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!