WSJ coverage sends stock market down

Hal Morris, writing on his GrumpyEditor.com blog, notes that The Wall Street Journal‘s front-page coverage on Monday helped precipitate the drop in the stock market.

Morris wrote, “Monday morning readers, including already fidgety investors and nervous Wall Street inhabitants, were greeted with the dreaded ‘R’ word on the front page. Under the headline, ‘Recession Fears Weigh Heavily on the Markets,’ the lead read: ‘Battered stock and bond markets are sending an increasingly ominous signal that a U.S. recession could be near.’

“The story by Peter A. McKay and Kelly Evans came up with a ‘but’ four paragraphs later. It pointed out the Fed’s policy makers expect economic growth to pick up, growing 1.8 percent to 2.5 percent next year.

“But that didn’t matter. What caught readers’ eyes was the now greatly feared ‘R’ word.

“Also giving investors the shakes was an adjoining comprehensive WSJ article by Laurie P. Cohen on the mushrooming problems, triggered by subprime loans, at Citigroup Inc.”

Read more here.