Nobody ever knows why the stock market goes up or down every day. But that doesn't stop people from offering reasons. For instance, people used to say that if oil prices fell, stocks would rise. They said that if the government came to the rescue of troubled financial institutions, that would boost stocks. And they suggested that if the Fed cut interest rates more than expected, investors would buy stocks.
But today, The New York Times decided not to even offer an explanation. It suggested that nobody knows. And I agree with the Times -- I just disagree on all the other days when the media does offer an explanation for the daily movement of the stock market. Here are some of the discredited means of explaining today's move.
Oil. Today oil fell $1.70 which normally makes stocks go up.
Jobless claims. The number of people claiming "unemployment benefits last week rose to 444,000, near a five-year high," according to the Times. But those numbers have been rising all year.
So what is it? Could it be program trading? Could it be scary sounding words from bond investor Bill Gross on a light volume trading day?
The only people who know why they sold stocks today are the biggest investors in the world who traded. And they are not talking about why they made their move.
Thankfully, today nobody has offered an explanation for the 345 point decline. And until the SEC requires such investors to report on their reasons for trading -- we are really in the dark about what moves stock prices each day.