NEW YORK: Are we correcting yet? The markets picked up Wednesday where they left off: With volatile trading and wild fluctuations. The Dow plunged and rose more times than Greg Louganis; it ended up nearly 60 points. Either investors had taken the symbolic presence of a lion at the opening bell to heart, or there was a whole lot of bargain-hunting going on.
Don't be fooled by the rally. The market came nowhere near to rectifying Tuesday's losses, and the overall trend is down. "People haven't made money in the market for four or five months," says TIME's Wall Street columnist Daniel Kadlec. "The average stock is down 25 percent since the year's high. Smaller stocks are down 40 percent. This is a real correction, whether the Dow trips 10 percent or not."
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Inexplicably, it was the most inflated stock of all -- Internet companies -- that bucked the trend Tuesday. In the face of a 300-point Dow plunge, Amazon.com and AOL managed to close with small gains. "You would expect the mania-type stocks to be hardest hit," says Kadlec, "but there's still a lot of high expectations surrounding the Internet." A correction is a correction nevertheless, and Kadlec believes the tech bubble will burst soon enough. Indeed, AOL dropped three points amid Wednesday's rally. Don't say we didn't warn you.