Local stocks were caught in Wall Street’s whipsaw action Monday that began with a 1,000-point drop in the Dow Jones industrial average, followed by a subsequent rebound and a final selloff that left the index more than 588 points down.
“I feel like I’ve been at Worlds of Fun all day on the scariest ride there,” said Rich Jones, a portfolio manager at Mitchell Capital Management Inc. in Leawood.
Stock prices have fallen in what Jones considers a normal market contraction, with no sign of a bear market ahead, which generally is considered a drop of 20 percent or more. Jones and others note that the U.S. economy remains generally healthy, with strong auto sales, good job growth, positive housing activity and better-than-expected retail sales.
Money managers also said they were content to let the market find firmer footing before counting the ride finished.
“Until a catalyst comes to turn this the other way, it’s going to stay pretty soggy,” said Hank Herrmann, chief executive of Waddell & Reed Financial Inc. in Overland Park.
Shares in most of the largest Kansas City area public companies lost ground Monday. Among the hardest hit were Waddell & Reed Financial Inc., YRC Worldwide, DST, and UMB Financial. Sprint Corp. and Cerner also finished lower.
Investors are nervous about China’s slowing economy, sharply lower oil prices and uncertainty about what the Federal Reserve will do with interest rates at its September meeting.
In a note to clients, Overland Park-based Meritage Portfolio Management said that “unlike the 2008-2009 Great Recession, which was driven by a severe credit crunch...we do not see these factors occurring in the present environment.”
Monday’s sharp drop – on top of last week’s market losses — came as buyers largely stayed out of the market. Prices recovered but could not hold their ground as a wave of sellers gained the upper hand.
“This is when you want to buy stocks, when people panic,” said Kent Gasaway, portfolio manager at Kornitzer Capital Management Inc. in Mission.
Among the hardest hit regional stocks Monday:
Waddell & Reed, down 7.6%
YRC Worldwide, down 6.6%
DST, down 5.9%
AMC Entertainment, down 4.3%
Garmin, down 3.3%
H&R Block, down 3.2%
Sprint, down 2.1%
Cerner, down 1.8%