After yesterday's sharp decline in the markets and stark reversal thanks to a few high-flying names, the market appeared to be sitting on fragile ground. When North Korea fired several artillery shells at a South Korean island overnight, equity markets dropped across the globe. Combined with fears of European sovereign debt and slowing Chinese demand, the global economic outlook is showing signs of strain. Although Ireland appears to have an EU/IMF bailout in place, all eyes are quickly shifting to Portugal and Spain. As concerns creep back into the marketplace, today marked a strong "risk-off" day.
For those who have been reading this blog, my outlook for the market the past several weeks has clearly been cautious at best. In the previous post, Optimism Reigns, I went as far as calling for a 5-8% correction in the near future. As equity markets sold off today, the Dow briefly broke below 11,000, marking a nearly 4% drop in just over two weeks. Although I expect the decline to continue for at least another week or two, for the first time in a couple months, buying opportunities are showing up on my watch list.
Abbott Laboratories (Ticker: ABT)