Money & Investing – Banks.com

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The U.S. stock market is heading lower today, thanks to the latest economic news. While traders mostly shrugged off the latest inflation data from October, they did take the fact that housing starts were dramatically lower to heart. Indeed, this concern has sent the three major U.S. indices lower. However, the move lower is not a complete rout, as the losses are relatively modest. The Dow has yet to lose 45 points. Another concern is that there could be a double-dip recession. This might cause some to reconsider making large moves with their portfolios.

Indeed, one of the reasons that gains and losses yesterday and today have been relatively staid is that volume is way down. MarketWatch reports on trading volume for the U.S. stock market:

On trading floors, professional traders lamented a lack of market participants once again Wednesday. Even during the Dow’s now more-than-two-week run higher, volume has slowed down dramatically, with traders saying many of their larger clients, including hedge funds, have ceased making large portfolio changes lately.

“This is another quiet day in a string of quite a few,” said Stephen Leuer, a floor trader with X-FA Trading in Chicago. “Some shops are making assumptions we will continue this rally through the end of the year and not making many changes. It’s kind of like a game of musical chairs, everyone is still standing around not ready to take a seat — just waiting for someone else to make the first move.”

For most ordinary investors, who use online trading accounts and retirement accounts for the bulk of their investing, this remains largely a waiting game as investors reposition their holdings and look into low-cost index funds and ETFs that have the potential for gains in an earnest economic recovery. And, of course, those engaging in buy and hold investing, as well as dollar cost averaging, will be holding steady.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.