Local stocks
Here’s where share prices ended up for locally-traded stocks after Monday’s closing bell, when compared to the previous closing stock price.
• AK Steel Holding Corp.: up 11 cents, 4.91 percent, to $2.35
• AtriCure Inc.: down $1.28, 5.70 percent, to $21.16
• Cincinnati Financial Corp.: down $1.65, 2.79 percent, to $57.52
• Cintas Corp.: down $2.76, 3.03 percent, to $88.29
• First Financial Bancorp: down 57 cents, 3.15 percent, to $17.50
• Fifth Third Bancorp: down 55 cents, 2.74 percent, to $19.55
• Cedar Fair Entertainment Co.: up 1 cent, 0.02 percent, to $55.85
• General Electric Co.: down 44 cents, 1.41 percent, to $30.71
• The Kroger Co.: down 67 cents, 1.60 percent, to $41.16
• LCNB Corp.: down 6 cents, 0.37 percent, to $16.30
• The Procter & Gamble Co.: down $1.04, 1.31 percent, to $78.37
• Park National Corp.: down $2.79, 3.08 percent, to $87.69
• Rex American Resources Corp.: up 71 cents, 1.31 percent, to $54.78
• Teradata Corp.: down 17 cents, 0.64 percent, to $26.25
Source: Yahoo! Finance
Concern over the health of the Chinese economy accompanied by rising tensions in the Middle East combined to drag down stock markets around the world Monday, as investors kicked off 2016 on a sour note.
The gloomy start to the New Year saw the Dow close down more than 276 points, or 1.6 percent, after tumbling more than 470 points in midday trading. Meanwhile, the Nasdaq declined 2.1 percent, and the S&P 500 lost 1.5 percent by the close of trading.
Several regional companies saw their stock prices hit hard, including West Chester-based medical device maker, AtriCure Inc., which closed at $21.16, down $1.28, and Cintas Corp. of Cincinnati, which saw its shares fall $2.76 to $88.29.
“Today’s drop in the stock market reflects our increasingly connected global economy,” said Rachel Wilson, assistant business professor at Wittenberg University. “It reflects the U.S. market digesting China’s drop, and is most likely heightened by first day of the year trading jitters.”
Manufacturing surveys showed Chinese factory activity contracted for the 10th straight month in December, while manufacturing in the U.S. contracted in December at the fastest pace in more than six years.
At the same time, however, an improving labor market, which has brought unemployment in Ohio down to levels not seen in more than a decade at 4.5 percent, coupled with burgeoning wage gains are supporting consumers’ spending power and preventing U.S. factory activity from slowing even more, according to James Brock, a Miami University economics professor.
“You have to put these things in perspective,” Brock said. “The economy seems to be slowing down, but it’s still growing, and right now, we’re one of the bright spots of the world. That should be good for the market in the longer term.”
Brock said much of the volatility in the market has nothing to do with underlying economic fundamentals, but rather fast-trading individuals and institutions trying to capitalize on short-term market trends.
“The U.S. market is driven by traders, not investors, trying to out guess one another,” Brock said. “If the markets are going down, they try to make money off that. The same is true if the markets are going up. So, in the very short term — day-to-day, hour-to-hour — their actions amplify changes that take place in the market.”
Over the long term, Brock said he would not be surprised to see a slight pullback in the market in the coming months but expects market’s to continue to climb.
The extent of a pullback will depend in large part on how much further the U.S. Federal Reserve is willing to raise short-term interest rates this year after last month’s rate increase — the first in almost a decade.
“There are people who have money in stocks simply because they couldn’t get any interest on CDs and things like that,” Brock said, adding that if interest rates start to jump, he thinks many investors will get out of stocks an into safe-haven assets, such as certificates of deposit and savings bonds. “I would expect to see some more money come out of the stock market.”
But Bill Wood, director of the financial services program at Wright State University, said the current market volatility could present attractive buying opportunities for savvy investors.
“This is not a whole lot different than what we saw in August of last year,” said Wood, referring to a nearly 1,700 point drop in the Dow in less than a week late last summer, which was also driven by concerns over a slowdown in China.
Even with Monday’s sell-off, investors who were brave enough to put cash into the market at its bottom last year have seen their investments return to positive territory with greater gains than most buy-and-hold investors.
“I don’t think it’s a panic situation,” Wood said. “I think it’s an opportunity to look carefully at your portfolio and understand how much risk is in your portfolio. Understand how much risk you want in your portfolio going forward, and see if there is not an opportunity to selectively delete and add to your portfolio in these down days.”
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