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Jul 26 2007 12:00am EDT

Eyes on the Dow

DealBreaker's John Carney is obviously worried about the stock market today. At last glance the Dow was down more than 400 points, with Alcoa and GM both down more than 6%. Nasty, to be sure. But the Dow, as we all know, is an average, not an index, and doesn't necessarily reflect the stock market as a whole. Indeed, today the S&P 500 is actually doing even worse than the Dow.

But as Carney found out today, the trading curbs on the NYSE are based on the S&P 500 or on any stock market index: they're based on the DJIA. Which is just weird. After all, IBM and Boeing between them account for more than 13% of the DJIA: if they both plunged in early trade, they could bring the entire exchange to a halt even if no other company fell a penny. Add in a couple more companies (Exxon and 3M, say), and you're already well over 20% of the Dow right there.

In any case, I'm utterly unworried about this latest stock-market wobble. The Dow is still well above 13,000, and in fact has never traded this high in its history except for a brief period earlier this month. I'm sure that there are going to be all manner of apocalyptic headlines tomorrow morning, but really this is little more than a bit of long-absent volatility finally finding its way into the stock market.

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