With all the turmoil in not only the economic conditions of the United States but globally as well we can very well see the effects of all the panic due to the banks failing, the automotive industry in potential ruin in the USA, energy fluctuations and many, many other events that can send various sectors of market into orbit or down like a lead balloon.
When the media releases a story on a particular stock or a specific incident in a noteworthy sector, the effect can be felt in most issues that make up that sector, and those online trading can be in for a bit of a wild ride. When such news is very positive, many stocks within that sector can feel the results of that news to some extent and reap some of those benefits, although not themselves the recipient of the good news. This is also true for stocks receiving news that is not positive, it can be a roller coaster of turmoil. As a day trader, one must be extremely careful as trading on news can be tremendously difficult as you don’t accurately know if any news had previous leaked out on that particular issue and has already been slowly accounted for in the market. Many times such news has trickled out, and by the time it is released to the public, day traders and others are jumping in and out of that stock causing wild swings within that issue. It is for this reason that when online trading, I prefer to trade the secondary stocks in that sector as I feel it tends to lower my risk while still taking advantage of the excitement of the news.