Chattanoogans said Monday they're mostly taking a wait-and-see view of the rocky roller-coaster ride on which the stock markets are whip-sawing investors.
The Dow Jones Industrial Average gyrated more than 1,000 points during the day before closing at 15,871.35, down 588.40 points, or 3.57 percent. That was on top of a sharp sell-off late last week.
Local stocks
Chattanooga’s publicly traded companies have all lost value in the past week. Monday’s closing price for local stocks, and their change since the close of business last Wednesday, were:* Covenant Transportation, $21.51, down 13 percent* Unum Group, $31.85, down 10.4 percent* Mohawk Industries, $190.33, down 9.7 percent* CBL & Associates Properties, $14.81, down 9 percent* Dixie Group, $10.31, down 8.1 percent* Astec Industries, $35.30, down 5.5 percent* Miller Industries, $19.95, down 5.1 percent* First Security Group, $2.42, down 5 percent* Cornerstone Banchares, $3.71, down 2.3 percent
"It's a stock market cycle," said Mike Newton in downtown Chattanooga. "I'm keeping an eye on it."
Charlie Poss said he doesn't think what has happened to the markets since the end of last week is as bad as many believe.
"I'm just watching and seeing what happens," he said.
Experts said the markets are in a correction that's overdue.
"Definitely," said Jim Campbell, managing partner of Campbell Asset Management.
Campbell said it has been over three years since the last market correction, or a drop of about a 10 percent in an index. That time differential between corrections has occurred just once since World War II, he said, and that was in the 1950s.
"We've been lulled to sleep so to speak," Campbell said.
Chris Hopkins, vice president and portfolio manager for Barnett & Co., said corrections typically average about a year-and-a-half between them.
"We finally got it," he said. "So, here we go."
Hopkins said he has been telling clients not to panic.
"We've all been expecting it and talking about a decent pull back," he said, adding that it's "a healthy thing. It's like a pressure cooker. You let off a little steam."
Hopkins said there's nothing systematically wrong in the U.S. economy, though China's economy is slowing more than many expected.
"Asia is now 25 percent of the global economy," he said.
Campbell said that the fact the Dow opened Monday down more than 1,000 points was basically "fictitious" and caused by a bunch of computer trades.
"Typically, bottoms are processes," he said, adding that what happened Monday likely isn't the end.
Campbell said it's times like this that having a reasonable amount in fixed income investments such as treasuries pays off.
"It's a brake on the down side," he said, adding that some think of them as boring investments.
Hopkins said he has told investors that if they have cash, "we're advocating putting some of that to work the rest of this week."
He added that he's betting the Fed will delay a potential September interest rate hike.
"It's not so much anything fundamental in the U.S.," Hopkins said, but rather there has been a substantial decline in other currencies of countries around the world. He said there are fears a rate hike could trigger a debt crisis and global recession.
Campbell said he also is doubting a September rate hike. But even if there is, he said, the increase may be "once or twice and it's done."
"The real story is that it's apparent the Fed is not going to be able to raise rates significantly during this economic cycle," Campbell said.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.