This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Should You Fear a Market Plummet Whenever Harry Reid Speaks?

Stocks in this article: ^DJI ^GSPC ^IXIC

NEW YORK ( TheStreet) -- Your best bet is to not bet against Harry Reid. Simply ask the markets.

The U.S. Senate majority leader from Nevada emerged late Tuesday afternoon to tell reporters that it would be "extremely difficult" to address the so-called fiscal cliff before Christmas. The comment triggered a selloff in the the major U.S. equity indices late in the day.

"Harry Reid pulled an Apollo Creed, it was kind of like a quick punch to the market," said Michael Gayed, chief investment strategist at Pension Partners.

Reid's comments may have initially concerned investors as the Democrat provided the first bit of clear language about fiscal cliff talks since President Barack Obama and his administration suppressed details of discussions that had transpired with House Speaker John Boehner over the weekend.

Boehner's office hasn't offered the public any more color other than that "the lines of communication remain open" between both sides. The White House also remained silent on the issue as Press Secretary Jay Carney said on Monday that he believed the best prospect for reaching an agreement was to not read details of the conversations between Obama and head lawmakers.

Reid has stood behind the president's plan to extend middle-class tax cuts and raise rates on the top 2% of income earners throughout the fiscal cliff debate, so his suggestion that a deal may fail before the holiday break was the first signal in days from a leading Democrat that negotiations may not be going as smoothly as presumed.

Stocks finished higher on Tuesday, but Reid's comments ended the rally and the major averages never returned to their intra-day highs.

So why is it that Reid's comments jolted the market, while investors seemed to shrug at Boehner's comments earlier in the day?

"This is one of the toughest son of a bitches you'll ever meet," said one source who has been a friend of Reid's since the politician first ran for the House of Representatives in 1982. "This is a guy who ran the Nevada Gaming Commission and effectively de-licensed the mob -- they put a contract out on his life ... his wife got in the car one day, turned the car on, and there was a bomb in it. ... He told them to go screw themselves."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs