I may be wrong, but it strikes me that the articles that appear in nearly every newspaper every day that describe a particular day’s stock-market movements are pretty much worthless.
They try to pin a cause or two on the effect that’s just been observed, when in fact the effect may have little relationship with the narrow causes being credited. Consider, for instance, this A.P. headline and news brief that appeared on Yahoo! News at about 2:30 p.m. yesterday:
“Stocks Surge to Start Q2″
Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.
How does the A.P. really know that investors “rushed back into stocks” because they were optimistic that “the worst of the credit crisis had passed” and that the economy is “faring better than expected”?
The A.P. folks sure didn’t learn this from reading their own business headlines. Here are five A.P. headlines that appeared directly beneath the stock-surge news brief.
- “Celent: 200,000 US Banking Jobs at Risk”
- “Manufacturing, Construction Weaken”
- “Ford, Toyota U.S. Sales Down in March”
- “Congress Has Big Questions for Big Oil”
- “U.B.S. Will Write Down $19 Billion”
Here are a couple of stock-market headlines I’d love to read one day:
“Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System”
or:
“Stocks Dive: Three First-Movers Sold Hard and Then Everyone Else Inexplicably Followed”
But I could probably live to 150 and never see that happen.
and 
. You can also watch it on 
What I don’t get about the stock market headlines is where the lines between plummet, dive, fall, drop, dip, droop, sag and slow are. One day a -.5% change is a dive but the next day a -1% change is only a droop.
why can’t even one new source standardize on its own terminology?
Speaking of Taleb, he has a post on his blog about this as well.
On the day SocGen was (poorly) unwinding Kerviel’s positions, there was a news story narrating the supposed reasons for the market decline which later turned out, of course, to be completely false.
I too support the more accurate headlines proposed. More so, I like the occasional reporting I catch on NPR, which is as follows:
“Today, the stock market Dow Jones index was down x%.”
With no further commentary.
Maybe these headlines were all just April Fool’s jokes.
Dave Barry was all over this many years ago, with his imaginary newspaper quote (from memory): “Stocks plunged yesterday on news that Saturn has 8 moons rather than 7 as previously believed.”
Hear hear! I don’t know how they manage to keep printing such things without looking like complete morons, but since it’s just entertainment as opposed to news, I guess they get a pass.
@ #4 RobertSeattle — I think it’s because the market capitalization of a company isn’t the same as the value of the company. Market cap is artificial in the sense that it values every share instantaneously at the same exact amount, which isn’t reality. If you really wanted to value an entire company you would have to understand what a willing and able buyer would pay for the whole company. If you could somehow know that number all the time, it would certainly change, but not every fifteen minutes!
Try to find an answer to “What is the value of a stock/company?”. You’ll be amazed at how many people think they know the answer with certainty, and how many of those certain answers contradict each other.
There are many factors, sentiment and newsflow among them. Look out for stock market sayings – “buy on the rumour, sell on the news” being a good one to explain why stocks sometimes fall after companies issue good results. In recent markets, rises are often caused by traders covering short positions – that is, they sold stocks they didn’t own when expecting then to fall, but have to buy those same stocks to cover their positions, thus pushing up the prices.
Crazy game…
This might have had something to do with it, as well. April Fools day can really getcha…
http://madconomist.com/market-rises-sharply-on-april-fools-joke