This Stock Market Recovery Play Just Got Derailed
The stock market has been choppy all week, and declines finally gained speed on Thursday. Investors are nervous about a whole host of issues, ranging from the pace of the economic recovery and the future path of interest rates and inflation to current valuations of the market in general and high-growth stocks in particular. At the close, the Dow Jones Industrial Average (DJINDICES: ^DJI) finished down 260 points to 34,422. The S&P 500 (SNPINDEX: ^GSPC) fell 37 points to 4,321, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped 105 points to 14,560.
A large part of the stock universe is sensitive to cyclical movements in the business cycle. Those stocks often rise and fall sharply when macroeconomic conditions appear to be in flux, and certain industries tend to be more cyclical than others. On Thursday, railroad stocks found themselves in the crosshairs of bearish sentiment, and it's unclear whether the drop will prove to be a bargain opportunity or just the beginning of a more extensive move lower for the companies.
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Source Fool.com
