If this is October, the stock market must be crashing. Everyone knows, after all, that markets take a dive at this time of year. The crashes of 1929, 1987 and 1997 all came in the 10th month. Now with the latest market jitters driving down indices around the world, the doom-mongers are saying: it must be time for another big correction.
There has been no single dramatic fall this October, but the Hang Seng Index is down nearly seven per cent since last Friday. In the United States, the Nasdaq on Wednesday night fell to within four points of its lowest level this year, while the Dow Jones was at its lowest level since June.
Various theories have been put forward for the October malaise. At one end of the scale, the superstitious point to the alignment of the planets, or sunspots, and so on. At the other end, people look at rising interest rates, trade imbalances, top-heavy corporate valuations or other economic fundamentals to try to predict corrections.
The stock market falls so far this year have been driven by the decline of the technology sector.
The hi-tech mood has changed since last year: investors have been taking a more sober look at companies' balance sheets: now they want to see hard evidence of good revenue models.
And the slowdown of the US economy is also taking its toll. Recently, big technology names like Intel, Apple, Motorola and Lucent have been forecasting lower profits, and this has hit sentiment across the sector.
