Stock market savvy

Melissa Preddy originally wrote this blog in September as she watched the Dow climb closer to 10,000. Today, it slipped above that mark in intraday trading.


Arcane symbols and hieroglyphics. Wild gesticulation. Chest-thumping, red-faced gurus spouting gibberish-laden predictions based on mysterious code spelled out in tiny black letters.

Some primitive cult ritual? Nope, just another day among the Wall Street pundits.

Sometimes, watching and reading the bombastic babbling that passes for stock market coverage, I feel irritated to think of the dissonance this stirs up in average saving-for-retirement investors.

They’re told to buy low and hold on for the long run. But the analysts gyrate on a minute-by-minute basis, tickers flickering like mad on TV and computer screens, riling up the audience over every fractional gain or loss.

You’ll do your readers a service if you try to stifle the hype. But some Wall Street symbols can’t be ignored, and Dow 10,000 looms.

Most analysts will say it’s just a psychological milestone with no real substantive import, but emotions do have a significant effect on markets, and big round numbers like this tend to make your readers look for an explanation. Especially since it gets the Dow Jones Industrial Average (DJIA) back into five-figure territory, if still a ways off the October 9, 2007 peak of 14,164.53.

Prepare now so you can expedite an online Web update when the magic threshold is crossed.

• Line up experts and analysts. Regional economists, certified financial planners (do a zip-code lookup ) and business professors at local colleges can put the move in historical perspective.

• If any of the 30 DJIA components are major employers or otherwise have presence in your area, you might want to line up an interview with their investor relations office and highlight their performance as a news peg for your story. This brochure outlines Dow components since the index was established in 1896.

• Get with graphics and decide what charts you’ll need to order; aside from the standing DJIA historical fever chart, you might want to show intra-day volatility or a list of how regional companies were buoyed.

If you’re going to write about the markets, you should be able to decipher the information on (what used to be) a typical stocks page, at minimum. Most of the basic metrics and measurements are self-explanatory, including the overall trading volume, the ratio of advancers to decliners and percentage changes. The rolling 52-week highs and lows are watched for individual stocks as well as indices. This Dow channel at MarketWatch.com is a very handy live recap of Dow activity; the site offers similar data for other major indices like the S&P 500 and the NASDAQ market.

It gets a lot more arcane; this InvestorWords glossary is a useful site to bookmark if you’re educating yourself about the financial realm.

The point of understanding these measurements is not so much to report them in the abstract – the wire stories can do that – but to mine them for information pertinent to companies and industries your readers care about. If you’re in San Jose or Austin, for example, and the tech sector leads decliners, you’ve got something to write about. If your big local employer gets added to – or kicked off – the Dow components list, readers who rely on the firm for their paychecks and pensions are going to click like mad on your Web update.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Watching September stock moves

Not content to celebrate the U.S. stock market’s modest summer rebound, analysts already are spreading doom.

September, they remind is, historically is the market’s worst-performing month – down an average of 1.4 percent since the great crash of 1929.

Which, by the way, took place at the end of October. The big market crash of 1987 took place that month, too, with Black Monday – October 19 – capping the selloff with the largest one-day U.S. market decline ever.

Despite the past October drama, though, September remains an ominous month for investors. And whether or not major indices do tank or buck the trend and remain buoyant, your readers will expect periodic analysis of what’s going on. The time to prepare is now, before you’re staring at CNBC some autumn afternoon watching those bright-red down arrows.

For a primer on covering market moves, check out this earlier tipsheet. As I mentioned there, I really don’t approve of riling readers with every change of direction the stock market makes. Investing, for most individuals, is a long-term proposition. Professional traders may jump in and out on a daily, hourly or minute-by-minute basis, but people saving for retirement shouldn’t be primed to react at every little blip of the Dow Jones ticker. The results can be tragic.

So don’t feed the fear. But don’t ignore your audience’s concerns, either. The best way to present a balanced approach to market swings – especially the further east you are, since that 4 p.m. close doesn’t leave much time before deadline – is to plan ahead. Start now to line up a stable of market experts who represent a variety of views and approaches – bank economists, CFPs, academics, market historians, traders. Get their after-hours contact info and have it at hand.

Get graphics underway, now, too, if you don’t already have standing Dow, S&P 500 and NASDAQ charts in the hopper. That will save valuable time on deadline. Weekly closing values are the usual data points for stock market charts.

Most important, line up your consumer voices in advance. No market story is complete without a retiree, an aggressive investor, a novice or all three to add perspective. Local investment clubs are a good source of knowledgeable average investors. BetterInvesting (the former National Association of Investors Corp.) is a 50-year-plus coalition of local investment groups; it specializes in educational materials and often will hook you up with members in your area.

Try to get permission to attend some meetings and take a look at real portfolios to better understand the way market gyrations and the way we cover them affect the nest eggs – and emotions – of average people.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Making Sense of Market Moves

Not to jinx anything, but we appear to be enjoying a little stock market rally this week.

The nation’s major indices – the NASDAQ, Standard & Poor’s 500 and the Dow Jones Industrial Average – each closed up at about 6 percent week-to-date Wednesday.

Decent earnings reports, a slowdown in reported credit card delinquencies, a weaker U.S. dollar (which is a good thing; one of these days I’ll tell you why) and an upbeat Fed report all have pushed traders into a bullish mood. We’re not at a year-to-date high by any means – that happened back in January, on the Dow – but the trend is noteworthy.

If the bounce extends through the end of the week, you might want to consider a markets story. Readers who’ve been stuffing their unopened investment statements under the sofa cushions all year likely will have caught wind of the market uptick and expect local business coverage to reflect it in some way.

The trick: How to make sense of stock index moves when you’re not a market maven who does it for a full-time living. How can you add value beyond replicating a wire story?

Report the share prices of companies headquartered in your area, along with earnings they’ve recently issued, or other context about their business and industry. If you aren’t sure which local firms shares are traded, consult a local business journal; they often publish annual directories. Use corporate Web sites to get historical stock prices and other data for your charts.

Don’t overlook major local employers even if their administrative offices are elsewhere. Boeing Co., for example, moved its headquarters to Chicago in 2001 but you can bet its share performance still is of interest to thousands of workers and retirees in the Seattle area.

For market overviews and practical tips for investors, seek out economists at local universities and business schools. Beware of commentary from experts in commissioned sales-oriented jobs at banks, brokerages and insurance firms unless you’ve checked out the individual’s credentials and reputation. That isn’t to say all such people will produce nothing but self-serving quotes, but the scope for bias is great, as it is with representatives of most industries. If you want remarks from financial advisers, locate some fee-only Certified Financial Planner professionals; you may do a ZIP-code search for those in your area at the CFP Board of Standards site.

Another touchy area: It’s OK to acknowledge significant stock market fluctuations – but for most individuals, investing is a very long-term proposition. As far as I’m concerned, it’s unethical to hype short-term gains and losses with big headlines, dramatic pull quotes and other eye-catching devices, thereby training your readers to overreact to ordinary volatility. Financial message boards are rife with poignant posts from spooked investors who locked in losses at the bottom and are, inexplicably, waiting until markets climb before they buy in again. Be sure your coverage and its presentation are balanced and informative, not sensational.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.