Why is the stock market taking a dump?

[Dave Gray]

Two days now, it's dropped --- down 400 to 500 points in a row.  What gives?

[side note]

On the Daily Show, they showed a clip of Jim Kramer saying that the stock market loves Scott Brown.  Since then, we've had 2 consecutive 200+ drops.  I am not blaming Brown.  I think it's completely unrelated.  I just think it's kind of funny that Kramer continues to be so off base with this stuff.  He's like a TV psychic.

[/side note]

We saw some increases from speculation on the Apple tablet.  Usually these big moves are due to something going on in the market.  I know that earnings were released recently.  Maybe that's it.

[bsmooth]

It probably has something to do with the fact the White House just announced they were going after Wall St and banks with even stricter regulations.
Unlike health care which the public is unsure of, the voters all pretty much hate all the little Gordon Gecko clones that prolifierate Wall St. and would be more for this regulation.

[fyo]

A big part of it is simply profit-taking. After huge increases, just a little bit of uncertainty will get investors to sell off part of their stocks to secure the profits. It's always been that way.

The Nasdaq almost doubled in less than a year, so a sell-off of about 5% (!) is supposed to be a big surprise? These things tend to avalanche, starting from just a small uncertainty.



The 1-year Dow looks very similar:



Neither chart accurately shows the drop over the past few days, but the Dow is currently at 10,173 while the NASDAQ is at 2,205.

Bottom line is, neither index has surrendered more than a few months of increases:

[BigDaddyFin]

Is it related at all to interest rates?  I seem to recall something about they set the buying rate for savings bonds/treasury bills in February but this may be mistaken.  Plus I heard something on the news in passing about the housing market beginning to show more signs of problems. 

[wyvernmcd]

Most of the time I ever notice stocks making a major move is dependent on companies quarterly figures which show if they are doing as well as they predicted 3-4 months ago or not. Most of the smaller companies that do this do effect the market but in slight movements. I have noticed that when big companies have announced bigger than expected earnings the market tends to go up.

Political things usually have influence as to what is going on too because the government threatens Wall Street and sometimes they get nervous and jump ship to save themselves. I am not really a fan of this stuff because other than part of my retirement fund, I don't have an interest in the stock market. Its basically legalized gambling but people get to take a cut of your profits whether you win or if you lose. Not a big fan of it.