Fear factor rises as bad news keeps on coming
— -- The credit freeze's effects keep popping up in different places, icing Wall Street with a stream of negative headlines.
Despite the market's recovery Thursday, a flurry of other bad news is reinforcing worries about how difficult it has become for some borrowers to get money. Each day's developments heighten fears that problems emanating from subprime mortgages are spreading.
The flow of scary news is pumping up fears that have been hurting stocks in recent weeks.
"A couple of weeks ago, fear was not in line with reality," says Richard Sparks, senior equities analyst for Schaeffer's Investment Research. "Now the reality is catching up and feeding on itself and causing more fear."
Others say investors are overreacting to recent headlines.
"The fundamentals don't justify the bloodbath," says Jack Ablin of Harris Private Bank. "There's a psychological frenzy where investors are taking the current turmoil and drawing a trendline."
Worries over continuous signs of a tighter, but still open, credit market have overrun reason, says Chris Orndorff, money manager at Payden & Rygel.
"Television coverage of financial events creates panic," he says. Stocks "should not be where they are. We're near a point you're really seeing value," he says.
Nonetheless, everywhere investors turned Thursday there was more bad news:
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