Tragedy in Boston not seen changing 'the big picture.'
The financial markets are mostly positive today, sending mixed signals to observers and financial advisers in the wake of yesterday's tragic explosions in Boston that left three dead and injured more than 100 people.
Although the equity market was down all day yesterday, the Dow Jones Industrial Average lost 90 points of its 266-point drop during the final hour, following the explosions near the finish line of the Boston Marathon.
“We're getting back today what we lost on the Dow after the explosions,” said Chris Wallis, chief executive and chief investment officer at Vaughan Nelson Investment Management LP.
For most of yesterday, the sell-off was being linked to the rapidly falling price of gold, which dropped by more than 9% in its worst single day since the 1970s.
But when the two near-simultaneous explosions rocked Boston around 3 p.m. Eastern time, there was little hope that the markets would produce any kind of turnaround.
The market's rebound today illustrates the resilience of the markets and, sadly, is a sign of how accustomed investors have become to such tragedies, Mr. Wallis said.
“Like all humans, we get used to stuff and unfortunately, this is the kind of thing we have grown to expect and will continue to get used to,” he said. “The market will realize it is not going to impact consumer behavior, as long as it is limited to what we witnessed yesterday.”
Hedge fund manager Henry Weingarten of The Astrologers Fund Inc., said that the market's rebound today “has nothing to do with Boston; the market is only reacting to yesterday's decline.”
“Right now, we're seeing bargain hunters that have come in,” he said. “As tragic as it was, the bombing in Boston is still considered an isolated incident that doesn't change the big picture.”
But even if the stock market can recover, such tragedies leave permanent scars, according to Joseph Wittholm, vice president of product development and ETF strategies at Emerald Asset Management.
“The market has not shrugged this off by any means, and it is certainly at the forefront of everyone's thoughts,” he said.
“But the threat, the source of which is still uncertain, is rightfully not being perceived as an economic threat. Instead, it seems as if it is being viewed as an unfortunate occurrence in the world in which we now find ourselves,” Mr. Wittholm said.
Mr. Wittholm, who is based in Leolo, Pa., said that he has heard from a number of friends and colleagues who are already planning to attend next year's Boston Marathon in a show of support.
“After thinking about it, they are right in their resolve,” he said. “And I'm planning to join them.”
Clint Struthers, owner of Struthers Financial Services, who described the explosions as “scary stuff,” admitted to being surprised that the stock market was up today, “given all the likelihood that it was a terrorist attack.”
“I've been of the opinion that the market has been up a whole lot more than that it should be for the better part of a year now,” he said. “I'm enjoying it, but at the same time, I'm watching the rearview mirror for what's coming.”
