I have almost zero knowledge about finance. I was wondering why market goes down/ up with big news. Recently market went down with the unemployment news and went up when pro-taliban had progress in Afghanistan.
If anyone really knew how it worked they would be millionaires. The simplistic view is... If you have higher unemployment, that is bad news. This can reduce consumer spending, and thus lower profits for some companies. Then you can have bad news like the Anthrax situation which is good for the drug company owning the vaccine. More complex.... You have "supposed market analysts" who are making guesses about the market and have influence over large pools of cash (mutual funds etc). If they make a guess a company will do very badly and the company announces lower earnings, the stock can go up because the earnings are "not as bad" as predicted. So sometimes you can have real bad news and market can go up, and good news and market goes down (ex higher earnings...but not as high as expected) Thats what makes it fun. Dan
Just the other day, I was thinking ... about this tiny ad: