Stocks ended an historically chipper month in a dour mood yesterday -- perfect for the Halloween funeral of ex-New Jersey governor John Corzine’s troubled broker-dealer, MF Global.
The Dow Jones industrial average spent all but the opening seconds in negative territory, thanks to the early-morning meltdown of MF Global, and showed particular weakness in the last hour when it lost about 125 points to close down 276.10 points, or 2.3 percent, to 11,955.01.
News in the afternoon that put further doubt on the likelihood of a European bailout spooked investors.
The spook-tacular Halloween slide capped what had been an unusually upbeat month for stocks, with the S&P 500 index up a whopping 14 percent as of Friday. With those gains in hand, the index was on track to post its best month since 1974.
Yesterday’s losses dampened the mood but stopped short of ruining the party. The S&P decline of 2.5 percent trimmed the gain for October to 10.8 percent, the index’s best performance since December 1991.
The Dow closed the month up 9.5 percent, its best since Oct. 2002.
“There’s still plenty to be nervous about,” said David Kelly, chief market strategist for JP Morgan’s funds group, who attributed last month’s rally to stocks’ super-cheap levels -- not improved economic sentiment.
Mark Dow of hedge fund Pharo Management, agreed, saying, “The mindset of most guys is still relatively bearish,” and that yesterday’s sell-off is a reminder that little has changed.
Kelly and Dow discounted MF Global’s contribution to yesterday’s decline, saying that while the bankruptcy did little to improve sentiment, Corzine’s troubled firm isn’t important enough to trigger widespread panic selling.
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