What did the stock market do today? It went crazy
The coronavirus crisis has caused an unprecedented level of volatility on Wall Street, accompanied by one day which saw the largest single-day drop on almost 30 years. Why stocks are collapsing is simple: the coronavirus is going to cost every business money, so they will have less profit and pay smaller dividends, so their stock is worth less. Such a correction is actually how the market is supposed to work: prices send signals to tell people what things are really worth, and the stocks are now not worth as much as they were in our recent economic boom. A more interesting question is why is there so much volatility? It has been reported in WSJ, and is obvious if you look at recent charts of the S&P 500 or the Dow Jones Industrial Average, that most of the volatility is either right when the market opens or right before it closes. They say that investors buy and sell based on news. I think the major institutional investors have ways to buy and sell US stocks while the market is...