Traders consider the president’s approaching televised appearances as a signal to sell, informed a specialist on the New York Stock Exchange trading floor on CNBC yesterday just before President Barack Obama’s latest in a series of TV speeches, observed Grumpy Editor.
Sure enough, the Dow Jones Industrial Average, already down 400 points at the start of Obama’s speech carried on broadcast and cable TV networks, dropped another 100 points at the conclusion of his comments about 12 minutes later.
When the market closed about two hours after that, the Dow Jones Industrial Average had plunged 634.76 points or 5.55 percent for the day, ending the day at 10,809.85.
That put the Dow below the psychologically-significant 11,000 level.
Rather than encouraging words, in efforts to stem the Dow’s plunge, the president blamed the first downgrade in the nation’s credit rating on political gridlock in Washington.
He said he hopes the downgrade will give Washington lawmakers a new sense of urgency to tackle long-term deficit spending, adding he did not believe reductions could be carried out with spending cuts alone.
Obama then went into recycling recent repeated talking points, including the need for tax reform, paying fair share, jobs to combat the “slow pace of recovery” and the need to raise taxes on wealthier Americans.
"Markets will rise and fall, but this is the United States of America,” Obama declared. “No matter what some agency may say, we have always been and always will be a triple-A country.”
“Our problems are imminently solvable,” he said.
For many investors, however, that was not enough.