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business Friday 4 February 2022
Swing shift: Wall Street's gyrations no cause for surprise

By STAN CHOE vate Wealth Management.
AP Business Writer "In the end, one of the su-
NEW YORK (AP) — What a per powers of the individual
wild ride. The stock mar- investor is the ability to fo-
ket hasn't been this crazy cus on the long-term."
since...a couple years ago. Of course, this bout of vola-
Yes, stocks have swerved tility may be different than
scarily this year as Wall all the past ones.
Street comes to grips with a The market has been shaky
Federal Reserve no longer as investors rush to get
doing everything it can to ahead of moves by the
prop up markets. The aver- Federal Reserve to shut off
age day last month saw a the support it's been pour-
swing twice as wide for the ing into the economy since
S&P 500, from its low point the pandemic began. The
to its high, as a year earlier. Fed is likely to start raising
In one dizzying day, it ca- short-term interest rates
reened from a 4% loss to a in March, among other
small gain. moves that will make bor-
Perhaps more jarring was rowing money less easy
that the S&P 500 flirted re- and leave less money slosh-
peatedly with a 10% drop ing around the economy.
from its record set on the first The market has seen such
trading day of the year. It's Pedestrians walk past the New York Stock Exchange in New York's Financial District, on March 23, rate-hike campaigns be-
a cold slap for the millions 2021. Associated Press fore, and they've been the
of people who got their cause of plenty of past 10%
first taste of investing in re- drops for the stock market.
cent years. Until the last few 49 such days, according tumult? Because stocks years, according to Robert Wall Street also already
weeks, anyone who began to S&P Dow Jones Indices. have proved to be some W. Baird. knows what it's like for the
dabbling in the market af- That's an average of four of the best investments for Broaden the horizon out to Fed to turn off the money
ter March 2020 had known every month. the long term, as long as 10 years, and the S&P 500 printer it used to buy bonds
a time where stocks pretty And a 10% drop for the S&P an investor can hang on almost always rises over to support the economy,
much only went up. 500 isn't a rare thing either. through the volatility and that timespan, with the de- and to then suck out some
The recent shakiness, They tend to happen ev- resist the temptation to sell. cade following the 2000 of those dollars sloshing
though, shouldn't come as ery couple years or so, with After every major down- dot-com bubble a nota- around the economy. But
a surprise to anyone. This is 23 of them over the last 50 turn for U.S. stocks, from the ble exception. That's why never before has the Fed
what stocks do, and it's the years. Last month's swoon Great Depression to the the general rule of thumb been doing both such
price that investors have didn't even count as one 2000 dot-com bubble to is for investors not to have things while a pandemic is
paid for their historically of them, because the S&P 2008's near-collapse of the money in stocks that they'll still raging and inflation is at
strong returns over the long 500 has yet to close a trad- financial system, the mar- need to use within the next a nearly four-decade high.
term. ing day at least 10% below ket has eventually gone on few years. That's why many on Wall
That 4% swing in one day its record. It's come close, to recover all its losses and "It can be a brutal combi- Street expect big swings
last month? In 2020, when but each time it pulled up- mark new peaks. nation when the market is to continue to shake the
the pandemic first struck, ward enough at the end of Following each of the S&P experiencing volatility, no market, even if stocks
investors saw 20 such stom- the day to stay above that 500's drops of at least 10% matter how common or have calmed down a bit
ach-churning days. In 2008, threshold. over the last 50 years, it's how normal it may be," said in recent days. But that
during the throes of the fi- Why would anyone put climbed an average of Ross Mayfield, investment shouldn't come as a surprise
nancial crisis, there were themselves through such 83% in the ensuing five strategy analyst at Baird Pri- to any investors in stocks.q
Ford rides accounting gains, high prices to big 2021 profit

DETROIT (AP) — Ford Mo- reclassificaton of Ford's in- was constrained last year
tor Co. reversed a loss and vestment in electric vehicle by the semiconductor chip
rode some big accounting startup Rivian, the compa- shortage and other supply-
changes to post a $17.94 ny made $1.59 per share, chain disruptions.
billion net profit last year, falling short of analyst esti- "It's the supply chains that
even as it battled com- mates of $1.86, according limit what we could pro-
puter chip shortages that to FactSet. Revenue rose duce, what we could pro-
caused factory slowdowns 7.2% to $136.34 billion. That vide," he told reporters
and vehicle shortages. was short of analyst esti- Thursday.
U.S. sales for the Dearborn, mates of $137.61 billion. But Lawler warned that
Michigan, automaker fell The company said it ex- Ford faced increased com-
7% for the year over de- pects full-year pretax prof- modity costs for materials This Oct. 25, 2011 file photo shows a Ford logo on the tailgate
pressed 2020 numbers. its this year to rise 15% to such as aluminum, steel, of a pick-up truck, and on a Ford dealership sign in Salem, N.H.
But customers paid record 25% over 2021 numbers, to precious metals and resins. Associated Press
prices of nearly $51,000 per a range of $11.5 billion to Those costs increased $3
vehicle in Ford's most lucra- $12.5 billion. billion last year, and Ford winds that we're working a loss of $1.28 billion last
tive market, according to Chief Financial Officer John sees them rising another through," he said. "It's pretty year as it also dealt with a
Edmunds.com. Lawler said Ford is seeing $1.5 billion to $2 billion this much across the board on huge restructuring, a costly
Excluding the one-time high demand for its prod- year. all of our commodities." recall and a decline in the
items such as the $8.2 billion ucts, but its factory output "That is one of our key head- Ford's net income reversed value of its pension fund.q