The stock roller coaster ended up, but since all the major market indexes hit record highs on July 16th, it has actually been a downhill slide for the markets. The Dow has lost more than 400 points; The NASDAQ has fallen by 12 per cent.
"So for three weeks we've been in a corrective phase," according to Larry Wachtel of Prudential.
The high-flying Internet stocks have been in free-fall. The auction site eBay, the brokerage site E-Trade, the bookseller Amazon.com, and America Online are all down at least 50 per cent from their highs this year.
But remember, says Wachtel, the bull market is now 4 years old. "At the peak in July we were up 10 trillion dollars and 7000 Dow points," Wachtel said. "Give me a break. What do you expect for an encore? I'm not a money machine."
Wall Street is also warily watching the Fed chairman, knowing the eyes of Alan Greenspan will be on tomorrow's unemployment numbers.
If Greenspan sees a hint of inflation, the Fed could raise interest rates again at its August 24th meeting. The markets will be uneasy until then.