Stock market takes a powder on weak housing, consumer confidence
In other words, the market is telling the optimists who expect a recovery -- weak and erratic though it may be -- in the second half of the year to go take a hike.
The S&P 500 Index, which had its best quarterly performance since 2003, dropped 1.01 percent to 918.30 in late afternoon trading. Meanwhile, the Dow Jones industrial average fell 1.03 percent to 8,441.41 and the Nasdaq Composite Index dropped 0.34 percent to 1,836.83.
"You had a great market run-up this quarter and people are starting to wonder what's going to happen next," Jonathan Vyorst, senior vice president at New York–based Paradigm Capital Management, told Bloomberg News. "The fundamentals of the economy aren't really that strong."
Indeed not. Oil prices have climbed considerably over the past few months -- some analysts predict that prices will soon ease -- and the housing market's rate of decline in prices, though easing, is still rapid. Selling a house remains a serious challenge in hard-hit markets such as Florida, Nevada, and California.
Economic recoveries don't occur as straight shots up from the bottom. Many fund managers have pointed out that the recovery may be too weak for many Americans to take notice. Our recovery may not feel like a recovery for some time.
About the only way for investors to keep their sanity is to remember Murphy's Law, because everything that could go wrong has gone wrong -- and still isn't right.