Yesterday a new bottom. Today another bounce.
Wall Street once again is confounding investors with its bi-polar behavior.
Neither the unsurprisingly weak September retail sales figures reported today nor the unexpectedly steep drop in claims for unemployment benefits gave Wall Street any real justification for stock prices to rebound.
But they did.
The Nasdaq composite index roared ahead almost 4.5 percent while Dow Jones industrial average and the Standard & Poor's 500 index were both up about 3.5 percent. The Dow gained 248 points to close at 7,533.95. The S&P was up 27 to 803.91. The Nasdaq rose 49 points to 1,163.37.
The gain by the Nasdaq composite was the biggest one-day leap by that index since mid-August, when the current market slide began.
Market-watchers credited the big bounce in technology stocks to Yahoo! Inc., which posted slightly better than expected earnings. The vast majority of tech companies are reporting smaller profits than expected, but those stocks also went up today.
Well, then, why did stocks rebound so much today. The answer was the all-too-familiar refrain of the competing choruses that enlighten, entertain and infuriate investors.
Whenever stocks drop sharply, as they did on Wednesday, the dancing bears sing the blues. Oh the economy it is weak, and the war it is a'comin', they lament, ain't nothing gettin' better, still no reason to buy stocks.
But by the next morning, the bulls are crowing like roosters. Gonna be a bright, bright, bright sun-shiny day, all your bad stocks are goin' up, they say.
Until tomorrow, when the market most likely will go back down--for all the same reasons we heard yesterday. Or it could go up--for no better reason than it did today.
All individual investors can be sure of is that the markets are extraordinarily volatile, reacting--and overreacting--to anything--or nothing.
Today's report on new jobless claims was pretty close to nothing. Unemployment benefits applications fell 40,000 from the previous week and fell below 400,000 for the first time in seven weeks. Economists said that didn't mean much. The weekly report is notorious for swinging wildly from week to week, and most labor market experts think the unemployment rate is headed up.
The September sales trends reported by major retailers confirmed concerns that consumer spending is slowing down. Even the Kohl's chain, which has the best growth record in the department store business, reported its sales slipped last month. For many retailers last month's sales were no better--or even worse--than last September, when cash registers were silenced after 9/11.
Today's best example of the market's erratic behavior was General Motors.
GM was one of the stocks that led the Dow down on Wednesday. Analysts warned that the automaker's profits are all but certain to slip once GM stops giving away car loans or that cheap financing loses its effectiveness as a sales builder.
Today the stock rebounded, after GM offered its cheapest car loan deals ever: No interest for five years, no money down, no payments for three months.
The latest loan give-aways seemed to confirm how hooked GM is on financing to move its cars, but for some reason the stock, which lost $2.59 Wednesday, gained $3.24 today.