HERE’S HOW LOCAL STOCKS FARED
Here’s where share prices ended up for locally-traded stocks after Tuesday’s closing bell, when compared to the previous closing stock price.
AK Steel Holding Corp., West Chester Twp.: -4.81% to $2.57
AtriCure Inc., West Chester Twp.: 1.59% to $24.86
Cintas Corp., Mason: less than 1 percent to $81.23
First Financial Bancorp, Cincinnati: less than 1 percent to $29.23
Fifth Third Bancorp, Cincinnati: -2.46% to $18.23
Cedar Fair Entertainment Co., Sandusky: up less than 1 percent to $51.97
General Electric Co., Connecticut (major regional operations): -2.47% to $23.28
The Kroger Co., Cincinnati: less than 1 percent to $33.70
LCNB Corp., Lebanon: less than 1 percent to $15.67
The Procter & Gamble Co., Cincinnati: -1.08% to $68.40
Park National Corp., Newark: up more than 1 percent to $80.54
Rex American Resources Corp., Dayton: less than 1 percent to $43.85
Teradata Corp., Miami Twp.: -4.45% to 27.70
Source: Yahoo! Finance
Three things to know
1. The early-day rally came after China lowered interest rates for the fifth time in nine months to try to boost the world’s second-biggest economy.
2. Strategists said that there was no obvious catalyst for the late sell-off, suggesting that investor confidence is still fragile after a series of big sell-offs.
3. At its peak Tuesday, the Dow was up 441 points from its previous day’s close. After a sharp sell-off in the final hour of trading, the index ended the day down more than 200 points. In all, it was a swing of more than 660 points.
U.S. stocks lost ground again on Tuesday, extending their losing streak to six days and snuffing out hopes that Wall Street could help end recent tumult in worldwide markets.
For most of the day, it appeared that the market had shaken off some of its worries about the slowdown in China: at one point Tuesday morning, the Dow was up by as much as 441 points. But sell orders began pouring in in the last 15 minutes of trading. The Dow ended the day with a loss of 204.91 points, or 1.3 percent, at 15,666.44. The Standard & Poor’s 500 index fell 1.4 percent, and the Nasdaq composite declined 0.4 percent.
The early-day rally came after China lowered interest rates for the fifth time in nine months to try to boost the world’s second-biggest economy. Other world markets surged on the news out of Beijing: European markets recovered almost all their losses from Monday, with Germany’s DAX jumping 5 percent, while France’s CAC-40 rising 4.1 percent.
But the late sell-off doomed investors’ hope that Wall Street would follow suit. Market analysts said that there was no obvious catalyst for the late sell-off, suggesting that investor confidence is still fragile after a series of market losses.
Economists say the fundamentals of the American economy are strong. Home values are up. Gas prices and mortgage rates are down. Inflation is low. The pace of layoffs has dwindled, and unemployment has dropped to pre-recession levels.
But investors are trying to assess whether there is a broader and deeper global economic slowdown brewing, given recent discouraging economic data out of China and the government’s surprise devaluation of its currency this month. A slowdown in China has the potential to significantly crimp demand for oil and other commodities, a ripple effect that could dampen global economic growth.
“There are pockets of extreme weakness in China’s economy but also areas of strength,” said Mark Williams, chief Asia economist for Capital Economics in London. “The services sector seems to be doing well, but industry is really struggling.”
Beyond China, traders are waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in nearly a decade as early as this year. The Fed isn’t expected to deliver a policy update until it wraps its next meeting on Sept. 17.
Investment advisers and financial planners have urged “Main Street” investors whose 401(k)s and Individual Retirement Accounts include stocks to stay the course despite the cumulative losses of the last six trading sessions. But that advice is easier to swallow for younger workers who still have plenty of time to recover the late-August losses than it is for retirees and those approaching retirement who are counting on their investments to pay their bills.
Those investors often hear diverging viewpoints from planners and advisers regarding what proportion of their retirement investments they should keep in equities: a smaller percentage for protecting account values from losses, or a larger proportion in an attempt to stay ahead of inflation.
Some local planners and stockbrokers counseled Tuesday against panic selling in a down market, no matter what age the investor.
William Wood — a certified financial planner with the Centerville firm of Adams Wealth Management Group and director of the financial-services program at the Raj Soin College of Business at Wright State University — said knee-jerk responses to the stock market’s swings, whether up or down, are a bad idea in the long term.
“And if you sold your stocks yesterday morning (after the Dow’s 1,000-point plummet), you already wish you hadn’t,” Wood said.
Those approaching retirement are usually advised to shift some of their higher-risk investments into less volatile investments, Wood said.
Each investor has a varying tolerance level for risk, and the proper investment strategy will align to that risk-tolerance level, Wood said. That strategy also will shift based on on whether investors are receiving defined-benefit retirement income from company or military pensions, annuities or Social Security. Those monthly benefits can provide a safety net, and perhaps allow for a portion of retirement funds to be invested more aggressively, he said.
Som Hanvanich, certified financial planner and owner of Hanvanich Financial LLC in Kettering, said she views the market’s fluctuations as normal and expected. Hanvanich said some investors may want to “re-balance” their portfolios to ensure their investments match their risk tolerance.
“I would not, however, recommend anyone wait to implement a re-balancing plan because he or she thinks that tomorrow — or next week, or next month — the market will go up or down,” Hanvanich said.
Kimberly Tucker, financial adviser with Edward Jones brokerage firm’s Centerville office, said the late-August market correction was expected, even if it was overdue. “It’s normal, it’s natural, it’s necessary,” Tucker said, especially after the unusually long run of positive returns over the past six years.
Investors who see a loss of 15 to 20 percent on a stock value should recognize that the lower price represents a loss only if the investor sells the stock — and even then, if the stock was purchased five or six years ago, the investor is likely still ahead, Tucker said.
Still, “If your risk level has changed, and you don’t want to take this level of volatility, it may be time for you to re-balance” the portfolio, Tucker said.
This story contains material from the Associated Press.
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