Retail investors take gyrations in stride

By Herbert Lash

NEW YORK (Reuters) - Wall Street's roller-coaster ride, triggered by the meltdown in subprime mortgage lending, is spreading pain through financial markets -- but has not hit Main Street yet.

The bankruptcy filing by American Home Mortgage last week and the freezing of some funds at French bank BNP Paribas this week unnerved investors and roiled markets around the world.

Major central banks stepped in to supply liquidity to credit markets that were seizing up, helping to calm investor jitters and stem the fear-driven indiscriminate selling of securities that markets experienced on Thursday and Friday.

"As bad as things are -- and they're bad -- people are imagining even worse and are dumping stocks willy-nilly," said Chip Hanlon, president of Delta Global Advisors Inc. in Huntington Beach, California.

Talk about credit and speculation about hedge funds lead traders and investors to a "black-box area" that nobody understands and it is easy to start imagining the worst, he said.

"Investor sentiment is very clearly in the panic zone," Hanlon said.

Global stock markets fell in jittery sessions on Friday. The Dow Jones industrial average was off 0.75 percent at 13,171.18 in afternoon trade, and the FTSEurofirst index fell 2.4 percent, wiping out this year's gains.

World stock markets have shed more than 7 percent since hitting record highs only a month ago.

While the pain was sharp on Wall Street, the little guy was taking the market's ups and downs in stride.

"I'm still young, so I just trust that (the market) will rebound," said Dawn Meyer, 35, who works at a law firm in the suburbs of Indianapolis, Indiana. She said her 401(k) retirement account was set to ride out the market gyrations.

"It'll be a while before I retire, so it'll be a while before I have to readjust my 401(k)," Meyer said as she stood in Times Square with her mother under the awning of the Hard Rock Cafe.

Nearby, Luis Mercado, a 32-year-old New Yorker selling spa treatments to passersby, expressed concern about the market turmoil.

"It doesn't affect me directly, but everything affects everything. I'm aware that people are nervous and I would prefer a more optimistic climate," Mercado said.

"I'm not Wall Street, I'm Main Street," he said. "But I can't say (the market) doesn't affect me. A big change at the top will always trickle down."

Other New Yorkers were also a bit nervous, and others a touch more sanguine about the market's gyrations.