By Clyde Noel

Stock Report

Were last Friday’s stock lows the bottom? When does investing begin to be fun again?

Many investors fear summer will continue with a steady string of declines. Instead of buying in hopes of a better future, investors are taking cover until the clouds hide behind the horizon.

Stocks have a habit of getting beaten back down after any kind of one-day bounce, which is what happened last Friday.

A number of factors are continually spooking the market and last Friday’s car bombing of a U.S. consulate guard post in Karachi, Pakistan, created a sudden drop. An attack on U.S. interests overseas can reverberate the equity market.

By the end of the day, The Dow lost another 115 points for the week, and the Nasdaq lost 31 points. The Town Crier index fell 2.3 percent to its low of the year.

Strong stocks like Adobe Systems fell 12.47 percent; Cisco, 9 percent; LSI Logic, 9.6 percent; Nvidia, 12.76 percent; and Rational Software, 16.88 percent.

The Dow’s support level is now 9,400, and the Nasdaq’s at 1,475. Schaeffer’s Investment Research offers that technical assistance each week. It is where the sellers are expected to emerge and start buying again. The levels are key elements of technical analysis which studies prices, volume and charts. Looking at the bright side of the stock market, bond prices are rising, forcing mortgage rates down. When stocks look hazardous, many investors turn to bonds. As demand for bonds goes up, prices rise, causing yields, or interest rates paid by bonds, to fall.

Several months ago, experts expected to see mortgage rates to begin rising. Economic recovery would make inflation a bigger threat and the Federal Reserve would respond by raising interest rates during the summer months. The recovery has been sluggish and it hasn’t turned out that way.

The cold streak for stocks continues because investors are nervous about the corporate scandals, the falling dollar overseas, global turmoil and another terrorist attack. When the weekend comes, many investors may sell because they are uncertain of events that could occur over the weekend.

Noel, a seasoned investor, covers the stock market for the Town Crier.