Markets Tumble on Sky Rumors

Updated: 6.38 p.m. PT May 14, 2005

NEW YORK, NY – The stock market suffered a significant sell off today as nervous traders reacted to the news that a piece of sky had fallen on an intern during his commute to work.

The Dow Jones Industrial average plummeted 251.8 points while the S&P was off 37.2. Shares on the NASDAQ dropped 62.4 points.

Rumors of the chunk of sky falling generated significant downward pressure on the indices. Profit taking by hedge funds also contributed to the fall, as well as normal quarterly portfolio adjustments by Institutional Investors.

The Sky Rumor fed into Wall Street’s fear of an economic slowdown and was seen as a sign of the impending popping of the bubble in real estate investments. Investors became more risk averse and sought relief in treasuries.

The dollar fell against major currencies, as investors saw the chunk of sky falling as a sign that America was overextended on its debt load. Oil finished the day higher, again.

Several companies announced higher than expected earnings, several announced lower than expected, and some companies even met their expectations to the cent. Several press releases were issued to help guide analysts toward an earnings target that the companies know they can beat, and some companies were dumb enough to cut their earnings targets, thus causing a sell-off in their stock and costing Executive Leadership millions on their stock options.

A few analysts upgraded the rating on their stocks in order to have something to go market to the money managers. A select group of analysts downgraded stocks in their coverage to differentiate themselves, but still to have something to market to the money managers.

Some economic statistics were released, some were better than expected, some worse than expected; based on their seasonally adjusted, weighted average forecasts using questionable sample data.

Traders reacted to all the news in a whirl of action as they didn’t really care what the news item meant to them personally, but how they thought the rest of the traders would react.

Overseas markets fell in sympathy as frantic traders learned to the news from abroad.