Stocks Suffer From New Year’s Hangover

A drop after a strong 2013

  • Share
  • Read Later
Seth Wenig / AP

A trader wears glasses celebrating the new year while working on the floor at the New York Stock Exchange in New York City, on Dec. 31, 2013.

Updated at on Jan. 2 at 4:10 p.m. EST.

After a giddy 2013, stocks fell sharply on 2014′s first day of trading Thursday. The Dow Jones Industrial Average was down 135 points, or 0.8 percent at close, and the S&P 500 had fallen 16 points, or .9 percent.

Though data released Thursday morning pointed toward a stronger economy, market watchers believe that good news was already anticipated by traders and that the post-New Year’s plunge was simply a backlash against the strong surge in stock prices at the end of December. The Dow Jones Industrial Average, for instance, gained 3.55 percent in December and 23.59 percent for the year in 2013.

“The trend in the data really isn’t the problem, they suggest we’re getting some improvement in the fundamentals.” Bruce McCain, chief investment strategist at Key Private Bank told CNBC. “But the markets have been superlative, and you can only keep that up for so long. At some point we get a stronger corrective pullback than we’ve seen in the last few years or so.”