View Full Version : Economics The Dow is fun to watch

08-18-2011, 08:26 AM
if you like roller coasters...........with steep dives.



Dow Plunges 500 Points on Global Growth Concerns, Bleak US Economic Data
Thursday, 18 Aug 2011 09:40 AM
Share: More . . . A A | Email Us | Print | Forward Article

The Dow Jones Industrial Average fell more than 500 points, or more than 4.5 percent, in early trading Thursday after Morgan Stanley cut its forecast for global growth and government data showed that jobless claims rose and consumer inflation accelerated more than forecast.

After about 45 minutes of trading, the Dow Jones Industrial Average plunged 490 points, or 4.3 percent, to 10,920. At one point, the Dow was down 528 points, or 4.6 percent.

The S&P 500 was down 55 points, or 4.6 percent, at 1,139. The Nasdaq Composite tumbled 126 points, or 5 percent, to 2,385.

The ‘Unthinkable’ Could Happen — Wall Street Journal
Over one million Americans have heard the evidence for 50% unemployment, 90% stock market crash, and 100% inflation. Be prepared. Watch the Aftershock Survival Summit Now, See the Evidence.

Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) dropped more than 3.2 percent after Sweden’s financial regulator said his country’s lenders must do more to prepare for a worsening in Europe’s debt crisis that could freeze interbank markets and cut off funding.

Caterpillar Inc. (CAT) and Ford Motor Co. (F) declined at least 4.4 percent, pacing losses in companies which are most- tied to economic growth. Alcoa Inc. (AA) and Exxon Mobil Corp. (XOM) retreated more than 2.3 percent as commodity prices sank.

“It’s almost like a worldwide buyers strike,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “There’s a continued general malaise on global economic activity. People continue to downgrade their expectations on growth on a worldwide basis. There’s concern about funding problems. That’s making us very nervous here and as such we want to take risk out of portfolios at least for the immediate future.”
The S&P 500 has fallen 12 percent from a three-year high on April 29 through yesterday amid concern about Europe’s debt crisis and an economic slowdown. Financial, industrial, energy and raw-material producers had the biggest declines during that period, dropping at least 15 percent. Companies less-tied to the economy, including utility, consumer staples and phone providers, slid at least 7.7 percent.

New Lows

U.S. stocks may slip to new lows in the next few weeks, setting the stage for a rally of more than 20 percent in the S&P 500, Tom DeMark, the creator of indicators meant to identify turning points in markets, said in an Aug. 16 interview. The S&P 500, which closed at 1,193.89 yesterday, will probably drop below the 11-month low of 1,119.46 set on Aug. 8 before surging above 1,363.61, its peak on April 29, according to DeMark.

Global stocks sank today after Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to a report dated today.

‘Dangerously Close’

The U.S. and Europe are “dangerously close to recession,” Morgan Stanley analysts including Chetan Ahya said in the note. “Recent policy errors, especially Europe’s slow and insufficient response to the sovereign crisis and the drama around lifting the U.S. debt ceiling, have weighed down on financial markets and eroded business and consumer confidence.”

Stock-futures extended losses after a report showed that more Americans than forecast filed applications for unemployment benefits last week, signaling the labor market is struggling two years into the economic recovery. Jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, the highest in a month, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a rise in claims to 400,000, according to the median forecast.

A separate report showed that the cost of living in the U.S. climbed in July by the most in four months, led by higher energy and food prices. The consumer-price index increased 0.5 percent from June, more than twice the 0.2 percent median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The so-called core gauge, which excludes volatile food and fuel costs, rose 0.2 percent.

Intensifying Scrutiny

American banks tumbled, following losses in European financial shares. Bank of America, the largest U.S. lender by assets, sank 5.2 percent to $7.07. JPMorgan fell 3.1 percent to $35.45.

The Wall Street Journal reported that American regulators are intensifying scrutiny of the U.S. arms of Europe’s largest banks amid concern about Europe’s debt crisis, citing people familiar with the matter.

Concern about economic growth weighed on companies whose are most-dependent on economic growth. Caterpillar, the world’s largest construction and mining-equipment maker, slumped 3.2 percent to $84.80. Ford declined 3.8 percent to $10.69.

Commodity producers also retreated as oil dropped from a two-day high and copper slumped. Gold surged to records in New York and London as mounting concern about debt crises and slower economic growth spurred investors to sell equities and seek the perceived safety of bullion and Treasuries.

Alcoa, the largest U.S. aluminum producer, decreased 2.8 percent to $11.92. Exxon fell 2.4 percent to $72.37.

08-18-2011, 08:28 AM
You watch too many disaster movies. This smacks of conspiracy.

08-18-2011, 08:28 AM
You watch too many disaster movies. This smacks of conspiracy.

Shh! The adults are talking.

08-18-2011, 08:32 AM
Shh! The adults are talking.

I know. Thank you for reminding me. Now, go out and play! :D

Chief Henry
08-18-2011, 08:39 AM
Whiplash....somene call me a lawyer.