Anxious clients predictably called D.A. Davidson & Co. Tuesday inquiring about the diminished value of their investments.
"They wanted to visit and be comforted that this isn't the end of the world," Brad Hansen, the brokerage firm's senior vice president, said from his downtown Salt Lake office.
And was Hansen able to provide such comfort?
"The only thing one can do is help them understand the markets have historically come back and gone to higher highs," he said.
The Dow Jones industrial average dipped 465 points shortly after trading began Tuesday and bounced around throughout the day before closing with a milder drop of 128.11, or 1.06 percent.
The downward spiral followed the lead of overseas markets that had fallen for two straight days and also extended their own steep losses from last week. Fears of a U.S. recession one that would spread to other economies had investors fleeing stocks across the globe.
"If you're a Utahn, you feel like you're not as wealthy as you were," said James Wood, director of the Bureau of Economic and Business Research at the University of Utah.
Even though the equity in a home or value of an IRA drops on paper, the consequences are real when it comes to how people spend their money.
"People just feel a little less confident," Wood said. "You don't have as much wealth, so you cut back on some of your consumer items."
Hansen said this is a time for patience, not panic. He encourages clients to remove emotion from the equation in favor of facts and objectivity.
Not everyone shifted into panic mode.
"Is the economy really struggling?" said David Nielson, president of Low Book Sales, a Wasatch Front used-car dealer. "I haven't noticed."
Low Book sold 200 cars last week, more than it had ever sold in a week, he said. "We have been killing it."
Nielson didn't have an explanation for the continuation of what was a great 2007 in which company sales were up $10 million.
"Maybe (the economy) is affecting people in other industries," he said.
In addition to the unexpected stock market tumble, there are many other things at play that could affect Utahns, if not now, in the future.
"Don't worry," Wood said, "we'll get our turn."
Wells Fargo economist Kelly Matthews said Utah still has the "absolute best economy in the nation." And he doesn't expect that to change in 2008.
"But we will get some of our share of the difficulty, particularly in the housing sector," he said. "There will be some winners and losers in the housing sector."
Homebuyers, however, will be able to get a deal at an attractive mortgage rate, as will those with good credit looking to refinance.
The housing situation, energy prices, the Federal Reserve cutting interest rates and politicians fiddling with the economy will impact the Beehive State.
Though job creation in Utah continues to grow, if those factors combine to weaken the labor market, "that would be the most serious thing," Matthews said.Because of its strong economy, downturns don't usually catch up to Utah for a while. Wood sees less employment growth in 2009 and only moderate retail sales growth. "We're going to be less well a year from now."
Contributing: Associated Press E-mail: [email protected]
E-mail: [email protected]