Stock Market pressure points

“A mixed economic picture sent stocks tumbling Tuesday, with the Dow Jones industrial average falling 104 points, as investors were unnerved by weakness in home sales, consumer confidence and manufacturing. An upward revision in economic growth raised worries about higher interest rates.”

I just don’t get it. I’m an ‘investor’ too and I was unnerved by a lot of things on Tuesday as well, (including – and particularly – ‘weakness in home sales’) but it certainly didn’t cause me to go running to the phone to plead with my broker to “Sell, sell, sell!!! Sell everything!” I wouldn’t really know what sort of influence such economic news might have on my mutual funds or my tech stock or anything else.

How many ‘investors’ are really sure of the impact of economic news? How many of us would have concluded that an upward revision in economic growth might cause higher interest rates, even if we HAD actually read the report? I mean, maybe we would understand that, theoretically, from our ECON 101 classes, but apply it to our actual investment portfolio? I just don’t think so. I think most people are like me – we have investments, someone else takes care of them, we don’t switch them around on a day to day basis, and we don’t revise our investments with a particular piece of economic news. Especially since tomorrow’s economic news will probably mean to do the opposite of what today’s news suggested.

So who comes up with these ‘reasons’ for the market to have acted in a particular way on a particular day? I’d like to have a chat with them.

P.S. That was yesterday. Today's headline was "Stocks rise on strong consumer spending!" Doesn't anyone else wonder about this?