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Wall Street moves past latest ‘panic attack’

It took the Dow just five trading days to recover from its latest “panic attack,” a one-day, 373point dive May 17 when President Trump’s political troubles were being compared to Watergate and the “I” word — impeachment — was being thrown around.

The 1.8% dent it put in the Dow Jones industrial average made big news. But the panic turned out to be short-lived.

The Dow has moved beyond the scare. The market rebound has also propelled the Standard & Poor’s 500 stock index and techstock dominated Nasdaq composite to fresh highs. The buy-the-dip strategy lives on.

Edward Yardeni, chief invest- ment strategist at Yardeni Research, has been “keeping a diary” of these anxiety attacks since the bull market began in early 2009. By his count, the market has suffered 56 of these shortterm freakouts. What they all have in common is they turned out to be non-events and were followed by rebound rallies and eventual all-time highs for the market. They all proved to be “buying opportunities.” Only four of the 56 panic attacks resulted in official corrections, or market drops of more than 10% but less than 20%, Yardeni says.

Investors are suffering from “anxiety fatigue,” he says. “They seem to be less panic-prone.”

When asked what it will take for a panic attack to morph into a market heart attack, he said, “It will have to be something that causes a recession. Bear markets are caused by recessions.”