Fear can have a large effect on the stock market.

Associate Economics Professor Carl Campbell said the market can fall based on what people believe.

“The stock market falls when people start believing profits are not as high as expected,” he said.

Campbell said another factor that causes variation is a changing economy.

“A change in the economy causes the stock market to fall in value,” he said.

Finance Professor Robert Miller said changes happen based on how people see things.

“It’s in the eye of the beholder,” he said. “Prices change based on expectations on the future and recently those expectations have been downgraded.”

Associate Finance Professor Marc Simpson agrees with Miller.

“If expectations change or a company’s profits are lowered, people sell their stocks, causing a decline,” Simpson said.

Miller also sees psychology currently affecting the stock market.

“At this time, psychology is being played out in the market with confidence being shaken,” he said.

The effect of this lack of confidence causes people to try to get out of the stock market.

“The people getting out don’t have much confidence and are looking for a quick turn around,” Miller said.

The stock market falling can affect how much consumers spend, which can hurt jobs in DeKalb.

“People that aren’t as wealthy curtail to spending,” Campbell said. “If enough people reduce their spending, layoffs might occur, causing some to lose their jobs.”

Simpson said people’s fears are also a major factor to the stock market.

“There’s the fear of a recession due to economic news on the rise of unemployment,” he said. “And the fear of what is going to happen in the economy down the road.”

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