Stock Market

Small mutual funds that invest in the little guys of American business fared best as a group in the first quarter of 1989, with health and biotechnology stock funds leading the pack. But world income funds, which hold foreign currencies and bonds, actually lost money because of the U.S. dollar's appreciation against the Japanese yen and major European currencies.

As the worst bear market since the Great Depression sent her 401(k) account into a downward spiral, Cathy Coleman would shudder when her quarterly statement arrived. "When I saw it in the mail I used to say, 'Uh-oh,' " said the 58-year-old nurse in Tiburon, Calif. As her nest egg shriveled, along with those of many other Americans, a multitude condemned the 401(k) system as a failure and called for an overhaul to better protect people from the risk of huge losses. But with the stock market's stunning rebound since March, Coleman no longer delays opening her statement, and the urgency felt for reforming the 401(k)

Is that a cup and handle? Do I see a "W" pattern on the chart in front of me? I am sitting in my den in Venice, staring at a computer screen, trying to discern these things. The charts I am scrutinizing are of stock prices, and I am trying to find the right one, the one that's behaving like a stock whose price is about to soar. Finally, I think I've found it, a ladle-looking image that marks the rise, fall and rise again of a company's worth in the market. This particular company, EZCorp Inc.

The U.S. stock market today will close out its best year since 2003, an amazing comeback from what felt like Armageddon to many investors just nine months ago. Yet today also ends by far the worst decade for stocks overall since World War II. At 10,548 on Wednesday, the Dow Jones industrial average was up 20% for the year -- but still 8% below its level at the end of 1999. The last time the Dow failed to make any net progress in a decade was in the 1930s, when it sank 39% during the Great Depression.

They say that even the worst tragedies harbor the seed of something good. So here's something positive in the stock market's gruesome behavior over the last year: It may finally have driven a stake through the heart of the campaign to "fix" Social Security. Let's be plain about one thing: This campaign, cooked up mostly by Wall Street investment houses and conservative Republicans, was always about "fixing" Social Security the way one "fixes" a cat. The perpetrators employed what might charitably be labeled flapdoodle to scare soft-headed politicians, inattentive journalists and innocent citizens into thinking there's something fiscally out of whack with Social Security.

A tough, tasty steak of a book, Justin Fox's "The Myth of the Rational Market" arrived last fall just in time to explain how and why the smartest economists and best-managed institutions on Wall Street nearly detonated a bomb in the world's underpants. At the risk of oversimplifying: The abstract thing we call markets (trading in stocks, bonds, options, securities, etc.) is indeed rational -- predictable, mathematical, knowable. It's the human actors who are irrational, if not downright insane.

For investors, UAL Corp. shares now may look like a cheap ticket. But experts warn that taking this ride probably would prove costly. The stock rallied initially Monday as the airline giant filed for bankruptcy protection. The shares opened at 64 cents, soared as high as $1.19, then closed unchanged at 93 cents on the New York Stock Exchange. Stocks of companies in bankruptcy protection often are extremely volatile, and big rallies -- at least in percentage terms -- are common.

A powerful attraction of the Internet for many people is that it offers a stage where players may write their own parts. In the fluid and anonymous world of the Net message boards, a performer once cast as a villain may later take on the role of a hero simply by adopting a new persona. Consider "Steve Pluvia," an online short-seller who revels in puncturing over-hyped and dubious securities on financial message boards run by Silicon Investor and Yahoo.

A spectacular market crash, a dramatic rebound, a financial system and economy pulled back from the brink of collapse -- who writes this stuff, Hollywood? The most riveting reality TV of 2009 was what emanated regularly from Wall Street and Washington. Sacramento didn't lack for effort, either. Here are my picks for the year's most lasting financial memories: 1. Market Timer of the Year: President Obama. Wall Street greeted Barack Obama's ascendance to the presidency Jan. 20 with a 4% dive in the Dow Jones industrial average.

It's become an eerily familiar scene in the stock market and it happened again Monday: Fears of a terrorist attack prompt a quick and fierce sell-off of airline stocks and other terror-sensitive shares. When the market opened Monday, minutes after a jetliner crashed into a New York neighborhood, jumpy Wall Street traders rushed to dump the shares of aviation, insurance, hotel and entertainment companies that could be hurt financially by a terrorist act.

It was the fat cats' fault before. But now it's becoming Obama's. With the unemployment rate stubbornly high, people were already shifting blame for their economic woes to President Obama one year into his presidency. Last week, investors joined them. For 10 months, the stock market climbed at breathtaking speed. But the Dow Jones industrial average suffered its worst week since dropping to a 12-year low in early March. It fell 552 points Wednesday through Friday, including 216 on Friday.

The stock market posted its biggest drop in a month on concerns that tighter lending in China could endanger an economic recovery. Disappointing earnings from IBM and Morgan Stanley added to investors' angst. At the same time, sudden strength in the dollar pushed commodity prices sharply lower Wednesday, hurting stocks of energy companies and materials producers. The Dow Jones industrial average fell 122 points from a 15-month high but ended well off its lows for the day. Demand for havens like government debt rose, pushing yields lower.

Stocks bounced back Wednesday as the first day of hearings on the financial crisis, though contentious at times, turned out to be more civil than some investors had feared. The market also got a boost from a Federal Reserve report showing continued modest improvement in the country's regional economies. Ten of 12 Fed districts reported a positive change in conditions while two reported mixed conditions. The Dow Jones industrial average jumped 53 points, erasing its 36-point loss Tuesday, which marked Wall Street's first broad decline this year.

Stocks slumped Tuesday on a disappointing opening to earnings season and a move by China to restrain its economy. The Dow Jones industrial average lost more than 35 points. The market opened lower after the Chinese central bank unexpectedly told the country's banks to set aside greater reserves in an effort to keep inflation under control and to prevent bubbles from developing in real estate and other markets. Beijing's action, by reducing the amount of money that Chinese banks can lend, is likely to rein in growth of the country's economy, which has rebounded quickly from the global recession.

The stock market rally is aging, and the surest sign is that investors are migrating to stocks that missed out on 2009's big run. The Standard & Poor's 500 index is up 69% since March 9. The stocks hit hardest during the bear market, including financials and small-caps, led the rally during its first seven months. Now, however, investors are favoring utilities, telecommunication, healthcare and large-cap stocks. The shift is a natural progression in a bull market and suggests that most of its gains have already been realized.

As the worst bear market since the Great Depression sent her 401(k) account into a downward spiral, Cathy Coleman would shudder when her quarterly statement arrived. "When I saw it in the mail I used to say, 'Uh-oh,' " said the 58-year-old nurse in Tiburon, Calif. As her nest egg shriveled, along with those of many other Americans, a multitude condemned the 401(k) system as a failure and called for an overhaul to better protect people from the risk of huge losses. But with the stock market's stunning rebound since March, Coleman no longer delays opening her statement, and the urgency felt for reforming the 401(k)

The new year started as a happy one for the stock market as investors displayed a willingness to take risks. The Dow Jones index of 30 blue-chip industrial stocks jumped more than 150 points Monday as encouraging manufacturing data from the U.S. and abroad supported hopes that the budding economic recovery would gain momentum this year. The rally came amid concern on Wall Street that the market could get rocky early this year after its sizzling gains since last March. With the Dow rising 19% last year and other major averages doing far better, there's fear that stock prices may have outpaced underlying economic fundamentals, especially with high unemployment restraining growth.

A tough, tasty steak of a book, Justin Fox's "The Myth of the Rational Market" arrived last fall just in time to explain how and why the smartest economists and best-managed institutions on Wall Street nearly detonated a bomb in the world's underpants. At the risk of oversimplifying: The abstract thing we call markets (trading in stocks, bonds, options, securities, etc.) is indeed rational -- predictable, mathematical, knowable. It's the human actors who are irrational, if not downright insane.

The U.S. stock market today will close out its best year since 2003, an amazing comeback from what felt like Armageddon to many investors just nine months ago. Yet today also ends by far the worst decade for stocks overall since World War II. At 10,548 on Wednesday, the Dow Jones industrial average was up 20% for the year -- but still 8% below its level at the end of 1999. The last time the Dow failed to make any net progress in a decade was in the 1930s, when it sank 39% during the Great Depression.

A spectacular market crash, a dramatic rebound, a financial system and economy pulled back from the brink of collapse -- who writes this stuff, Hollywood? The most riveting reality TV of 2009 was what emanated regularly from Wall Street and Washington. Sacramento didn't lack for effort, either. Here are my picks for the year's most lasting financial memories: 1. Market Timer of the Year: President Obama. Wall Street greeted Barack Obama's ascendance to the presidency Jan. 20 with a 4% dive in the Dow Jones industrial average.