Today's been another sad day at the stock exchanges, bad earnings, more sub-prime worries and the DJI dropped over 200 points hovering around 13,000. First came Wal-Mart Stores Inc. that came out with decent earnings, but investors were deaf to that after they cut their expectations for the year. Next in line was Home Depot Inc., that added to the slide when it said weakness in the housing market caused their profit to be lower than market expected.
Others like Sentinel Management Group Inc., which is seeking to halt investor redemptions and even a couple of days ago Goldman Sachs Group Inc. said three funds it manages have had significant losses. Thornburg Mortgage Inc.'s shares dropped over 46% today after worries on their going concern from delaying dividends and warnings from the NYSE got out to the market. Other REITs are bound to show similar problems one by one in the coming months.
To ease the problems, global federal banks have been throwing money into the market to ease the possible losses at these financial banks and funds alike. Canada, Europe, Japan and more recently the Federal Reserve, which has injected some $64 billion of liquidity into the U.S. banking system, said they were ready to act again should market conditions warrant. Overall, more than US$150 billion have been added on a global basis.
This correction is by no means the simple one we experience earlier in February. Since mid-July, the major indices have cut their gains. The S&P 500 is close to wiping out all its gains and is ahead just 0.58%. More worries are expected to come.
Investors are best to stay out until things clear up.