Investors Look For Guidance Amid Global Sell-Off
By Steve Tawa
PHILADELPHIA (CBS) - Economists, money managers and analysts are sifting what investors should do as they watch the gut-wrenching rout in the markets.
The Monday mayhem began moments after the market opened at 9:30 a.m. The Dow Jones Industrial Average was off 1,000 points, or six-percent.
"It's correcting, no doubt about that," says chief economist Mark Zandi of Moody's Analytics. "It's a pretty vicious correction."
Zandi calls it a "garden variety correction:"
"This is not the time to panic. It's probably the wrong time to sell, so you should have a long-term horizon, looking out 4-5 years at least, and in that context, you should be looking through these ups and downs in the market."
This all follows a Friday rout which saw U.S. stocks suffer their biggest weekly declines in four years.
Ed Zelno of Oppenheimer & Co. has been following the markets for 40 years:
"What's really happening is a major loss of confidence in stocks and the dollar," he says, "and the earnings estimates which ultimately determine the future prices of stocks."
Market watchers say the trigger was China, where the Shanghai Composite closed down 8.5-percent.
"The fact of the matter is foreign markets, as important as they are, are secondary in terms of dollar values, to the American market," Zelno says.
The dollar dropped to a seven-month low and crude oil below $40.