What craziness is going on in the stock
market! The Dow is hitting
new highs! The biggest-gaining Dow component is Citigroup,
a company which just announced its earnings were going to drop by 60% this quarter!
Lahart can’t make heads nor tails of this crazy volatility, and accompanies
with the chart at left, showing the Dow zig-zagging crazily on its way to the
new highs above 14,000 that it’s hitting today.
To which all hysteria I just want to say: everybody, please, calm down. Here,
let me show you my own chart of exactly what the Dow has done this year. Citigroup
might be up a little bit today, but it’s still down substantially from where
it started the year (it’s at $47.95 now, after closing 2006 at $53.98). And
while stocks are certainly doing pretty well right now, movements of a couple
of hundred points in one day are really not very important when the absolute
level of the index is 14,000.
So take a step back, take a deep breath, and let the markets have fun with
their intraday gyrations. It’s really no big deal.