KAI RYSSDAL: Volatility doesn’t simply happen right? Just like your high school chemistry class, you need that certain combination of factors to create the right conditions.
Things finally came together today in that capitalist experiment that is the New York Stock Exchange. Retail sales figures released this morning were weaker than expected. The inference there is that consumers aren’t spending as much as they might.
There was more bad news about the subprime mortgage markets. But the higher things are, the farther there is to fall.
Diane Swonk’s the chief economist at Mesirow Financial.
DIANE SWONK: We’re at lofty levels in the stock market, and with higher levels on stock market you tend to get more volatility. The 1990s was extremely volatile. Yet the trend was probably too much upward through all of that volatility. So return of a little volatility is well within the range of what you should expect. It was the lack of volatility that we had in recent years that was the atypical kind of market condition.
Technology was weak today as well. Hopes had been that sector would lead the way out of the slump.
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