Archive for the ‘stock market’ Category

Since Obama Election, Stock Market Down 929 Points

November 6, 2008

Wall Street plunged for a second day, triggered by computer gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October. Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy’s struggles. While sales at Wal-Mart Stores Inc. benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.

Adding to investors’ list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market’s unease ahead of Friday’s October employment report, a widely watched barometer of the economy’s health.

“I think everybody kind of simultaneously — the consumers and businesses — is tightening belts so that’s triggering a reasonably precipitous slowdown that’s widespread,” said Ed Hyland, global investment specialist at J.P. Morgan’s Private Bank. “This is something that we haven’t really seen, this level of this rapid and significant pullback both in the market and the economy.”

Thursday’s rout follows a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points as investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.

Still, the market’s two-day slide follows an enormous run-up since last week so some pullback was expected, analysts said. Through the six sessions that ended Tuesday, the benchmark Standard & Poor’s 500 index, surged 18.3 percent.

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http://biz.yahoo.com/ap/081106/wall_street.html
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By Alexandra Twin
CNN Money
NEW YORK (CNNMoney.com) — Stocks slumped for a second straight session Thursday, bringing the Dow’s losses to 929 points since Election Day, as fears of a prolonged recession sent investors running for the exits.

The Dow Jones industrial average (INDU) lost around 443 points, or 4.9%. The two-session decline of 929 points, or 9.7%, marked the biggest two-session point loss ever and the biggest two-session percentage decline in 21 years, according to Dow Jones.

The Standard & Poor’s 500 (SPX) index lost 5% and the Nasdaq composite (COMP) declined by 4.3%.

The Dow slumped 486 points Wednesday as President-elect Barack Obama’s historic victory gave way to worries about the economy he inherits. Those same worries continued to drag on stocks Thursday.

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http://money.cnn.com/2008/11/06/markets/markets_newyork/index.htm?postversion=2008110615

Stocks likely to recover no matter who’s president

November 2, 2008

Wall Street prefers Republicans, McCain supporters argue. But stocks have done better under Democratic presidents, Obama supporters fire back.
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When it comes to the stock market — especially this turbulent market — does it really matter who is elected president?

Yes and no.

By MADLEN READ, AP Business Writer

Politicians do influence the economy — and they’ll play a big role in how the country emerges from this current crisis. But analysts say neither presidential candidate can be a cure for what’s ailing Wall Street.

Wall street broker William F. Lawrence looks at a monitor as ... 
Wall street broker William F. Lawrence looks at a monitor as he works on the trading floor of New York Stock Exchange shortly after the market opened Tuesday, Oct.28, 2008 (AP Photo/David Karp)

“The economy is a big, big machine, and the president is one government bureaucrat,” said Ron Florance, Wells Fargo Private Bank Director of Asset Allocation.

Moreover, most analysts believe the battered stock market has nowhere to go but up next year, no matter who ends up in the White House — and history will probably give the victor credit even if he actually had little to do with the rally.

“The timing couldn’t be better,” Florance said.

Still, the stock market is just one part of the economy, and under either Barack Obama or John McCain, the United States needs to recover from a downturn whose severity has not yet been determined. And either candidate will face a budget deficit of around $500 billion when he’s sworn into office — a shortfall expected to climb to $1 trillion next year.

Because of the deficit, the financial climate might end up affecting the new president’s policies more than his policies will affect the financial climate.

“This whole financial crisis will largely serve as an agenda buster for at least the first year,” said John Lynch, chief market analyst at Evergreen Investments.

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http://news.yahoo.com/s/ap/20081102/ap_on_bi_ge/
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U.S. Must Confront Possibility of Long, Deep Recession

October 16, 2008

By ADAM GELLER, AP National Writer 

NEW YORK – The U.S. has not endured a deep and prolonged recession in more than a quarter century — enough time for many Americans to forget what one feels like.

But unlike the last two relatively short recessions, this one could be much longer and more severe, potentially bringing with it anxiety and job losses not seen in many years.

“In thinking about recessions, people will naturally think back to the last couple” in the early 1990s and in 2001, said Paul Ashworth, senior U.S. economist at Capital Economics in Toronto. “What they should be looking back at is further.”

That requires dredging up memories of the economic slides in the 1970s, when an Arab oil embargo starved the nation of energy, and the early 1980s, when unemployment and inflation soared.

The last recession — coinciding with the collapse of the tech stock bubble and the terrorist attacks of 2001 — lasted just eight months. It was known more for the slow “jobless” recovery that followed than for the depth of the downturn.

Many economists agree that the nation won’t be so fortunate this time.

“I don’t think we can escape damage to the real economy,” former Federal Reserve Chairman Paul Volcker said this week in Singapore. “I think we almost inevitably face a considerable recession.”

The Fed’s current chairman, Ben Bernanke, delivered a more measured, but similarly grave assessment to economists, saying the recent financial turmoil “may well lengthen the period of weak economic performance and further increase the risks to growth.”

The signs of stress are starting to show: The U.S. has lost 760,000 jobs since late last year, and retail sales in September plunged 1.2 percent, the largest drop in three years.

Every recession is driven by its own dynamic and psychology. The current slump started with the collapse in the housing market and got worse with sharp restrictions on credit that pressured consumer spending and businesses.

That is a different environment from 1973, when an oil crisis was the culprit, squeezing U.S. businesses and consumers. In the early 1980s, raging inflation and high interest rates took their toll.

Both periods saw millions of Americans out of work. In 1975, the unemployment rate peaked at 9 percent. In 1982, it jumped to 10.8 percent.

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http://news.yahoo.com/s/ap/20
081015/ap_on_bi_ge/meltdown_
recession;_ylt=AtgNO7MiepobjPABCppxQ_qs0NUE

Stock Market Dives 733 or 8% on Fears of U.S. Recession; Second Biggest Drop Ever

October 15, 2008

I’m no economist but apparently I am smarter than the current Fed Chairman Ben Bernanke and President Bush.  They still have not acknowledged the recession we are in now….even after former fed Charman paul Volcker said we were in a recession yesterday.

DA!

We can all read and think and I stated categorically last March 8, 2008, that the United States was in a recession.  I made this statement after mulling over the facts starting around September 2007.  Turns out I was fully seven months ahead of former Fed Charman Paul Volcker who made the declaration yesterday.

Go figure!

By Matt Egan
Fox Business

Fears the U.S. will sink into a recession slammed Wall Street on Wednesday, sending the Dow plunging 700 points lower and below the 9000 threshold.

An ugly report on retail sales served as a wake-up call for the markets, reminding Wall Street that even as the ailing credit markets appear to have improved, the economy is still in a precarious state. 

Today’s Market

According to preliminary calculations, the Dow Jones Industrial Average lost 758.80 points, or 8.15%, to 8552.03, the broader S&P 500 dropped 92.11 points, or 9.23%, to 905.90 and the Nasdaq Composite lost 150.68 points, or 8.47%, to 1628.33. The consumer-friendly FOX 50 fell 64.93 points, or 8.68%, to 683.27.

The economic pessimism kept the pressure on the markets on Wednesday as the major indexes ended at session lows, never even peeking into positive territory. The selloff add to modest losses from Tuesday, combining to erase more than half Monday’s record 936-point surge on the Dow. 

“There’s still a little bit of gloom and doom in front of us,” said Michael Mainwald, head trader at LEK Securities. “Until some of these government-sponsored rescue plans work their way into the [financial] system, we’re going to have these 3% to 5% moves either way.”

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http://www.foxbusiness.com/story/markets/futures
-decline-earnings-return-prominance/

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U.S. Secretary of Treasury Henry Paulson (R) listens as Federal ... 
Above U.S. Secretary of Treasury Henry Paulson (R) listens as Federal Reserve Chairman Ben Bernanke (L) talks about financial markets, fear of recession and the Market Stability Initiative in the Cash Room of the Treasury Department in Washington, October 14, 2008.
REUTERS/Larry Downing (UNITED STATES)

I’m no economist but I can read and think and I stated categorically last March 8, 2008, that the United States was in a recession.  I made this statement after mulling over the facts starting around September 2007.  Turns out I was fully seven months ahead of former Fed Charman Paul Volcker who made the brilliant deduction today, October 14, 2008, that the U.S. was in a recession.  The current Fed Chairman Ben Bernanke and President Bush have still not acknowledged the recession we are in now.

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https://johnibii.wordpress.com:80/2008/10/14/obama-
really-believes-in-wealth-redistribution-money-goes-
from-those-who-earned-to-those-who-didnt/

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By TIM PARADIS, AP Business Writer

NEW YORK – Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after two disheartening reports convinced Wall Street that a recession, if not already here, is inevitable. The market’s despair — fed by a stream of disheartening economic data — propelled the Dow Jones industrials down 733 points to their second-largest point loss ever, and the major indexes all lost at least 7 percent.

Traders work on the floor of the New York Stock Exchange, October ... 
Traders work on the floor of the New York Stock Exchange, October 15, 2008. U.S. stocks slid at the open on Wednesday as investors worried that efforts to ease the credit crisis would not avert a recession, overshadowing solid profits from Coca-Cola Co , a bellwether for consumer spending.REUTERS/Brendan McDermid (UNITED STATES)

The slide meant that the Dow, which lost 76 points on Tuesday, has given back all but 126 points of its record 936-point gain of Monday, which came on optimism about the banking system in response to the government’s plans to invest up to $250 billion in financial institutions.

Wednesday’s selloff began after the government’s report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent drop analysts expected — made it clear that consumers are reluctant to spend amid a shaky economy and a punishing stock market.

The Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading came as Wall Street was refocusing its attention on the faltering economy following stepped up government efforts to revive the stagnant lending markets.

Then, during the afternoon, the release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors’ angst….

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http://news.yahoo.com/s/ap/20081015/ap_on_bi_st_ma_re/
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Asian markets surge on Wall Street rally

April 2, 2008
By THOMAS HOGUE, AP Business Writer 

BANGKOK, Thailand – Asian stocks surged Wednesday as investors took heart from an overnight rally on Wall Street amid a growing belief that the worst of the credit crisis is over.

Traders work on the floor of the New York Stock Exchange April ...
Traders work on the floor of the New York Stock Exchange April 1, 2008. U.S. stocks extended gains on Tuesday, lifting the benchmark S and P 500 and the Nasdaq up more than 3 percent, as Lehman Brothers Holdings Inc’s move to bolster its balance sheet calmed worries about the financial sector’s stability.(Brendan McDermid/Reuters)

In Tokyo, the region’s biggest bourse, the Nikkei 225 index jumped 3.3 percent in morning trade to 13,077.5. Hong Kong’s Hang Seng Index soared as much as 4.6 percent to 24,195.3.

In mainland China, the Shanghai Composite Index rose more than 3 percent, and benchmark indices in Australia, the Philippines, Singapore, South Korea and Taiwan all gained more than 2 percent.

“Investors believe the credit crisis in the U.S. is over,” said Francis Lun, a general manager at Fulbright Securities in Hong Kong. “They think the worst has gone.”

Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid easing worries about the credit crisis that has battered many major banks and optimism that the U.S. economy — a major export market for Asia — is faring better than expected.

Financial stocks were among the big winners in U.S. and Asian trading after Lehman Brothers Holdings Inc. and Switzerland‘s UBS AG issued new shares to help bolster their balance sheets. The news was viewed as upbeat and offset even an announcement that UBS will take a fresh $19 billion write-down due to additional declines in the value of its mortgage assets and other credit instruments.

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http://news.yahoo.com/s/ap/20080402/ap_on_bi_
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es8lkK_nQaROIe4YCs0NUE

US ponders: How deep is economic abyss?

March 23, 2008
By RACHEL BECK and ERIN McCLAM, Associated Press

NEW YORK – For months, Americans have been subjected to a sort of economic water torture — a maddening drip of bad news about jobs, gas prices, sagging home values, creeping inflation, the slouching dollar and a stock market in bumpy descent.
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Then came Bear Stearns. One of the five largest U.S. investment banks nearly collapsed in a single day before the government propped it up by backing emergency loans and a rival stepped in to buy it for a paltry $2 per share.

To the drumbeat of signs that seemed to foretell a traditional recession, this added a nightmarish specter — an old-style run on the bank, customers clamoring to pull their cash, a stately Wall Street firm brought to its knees.

The combination has forced the economy to the forefront of the national conversation in a way it has not been since the go-go 1990s, and for entirely opposite reasons.

As economists and Wall Street types grope for historical perspective — which is another way of saying a road map out of this mess — Americans are nervously wondering about retirement savings, interest rates, jobs that had seemed safe.

They are surveying the economic landscape and asking: Just how bad is it?

They are peering over the edge and asking: How far down?

And the scariest part of all? No one can say for sure.

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Even before the crippling of Bear Stearns Cos., the U.S. economy was acting as a slowly tightening vise — an interconnected web of factors combining to squeeze Americans from all sides.

Take Jaci Rae of Salinas, Calif. She runs a company, Luco Sport, that sells golf bags and accessories. The merchandise is made with foam, which is based on petroleum, so record oil prices have taken a heavy toll.

On the other end, her clients are feeling the pinch, too, and cutting back. Sales to retail clients are an eighth of what they were a year ago. So Rae had to cut five of her 20 employees loose.

Now the company isn’t buying products as far in advance. With gas prices running high, she waits for shipping companies to pick up products from her headquarters instead of having an employee drop them off.

She is nickel-and-diming expenses at home, too. She eats in every night, has stopped going on road trips to visit her family, dropped her satellite dish and canceled her monthly Blockbuster movie rental.

“I want to make sure I have enough money to feed my family,” Rae says.

Signs of the pinch are showing up everywhere:

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http://news.yahoo.com/s/ap/20080323/ap_on_bi_
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Fighting inflation: Vietnam and China take different measures

March 21, 2008

The State Bank of Vietnam has been taking a lot of measures to tighten monetary policies in order to curb inflation. It has issued VND20,300bil worth of compulsory bonds, raised state banks’ basic interest rates, raised the compulsory reserve ratio, and has been purchasing foreign currencies at a moderate level.  
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The said moves have had big impacts on the operation of commercial banks and led to a lot of side effects. The capital shortage has become more and more serious with the interest rate once hitting 25-27% per annum. Under the government’s instructions, the State Bank of Vietnam and Ministry of Finance will join forces to transfer the government’s money now kept at five state owned banks to State Bank branches for management. 
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The transfer of VND52tril is believed will have big impacts on the monetary market. Experts say that the move may cause the lack of VND25tril for the banks, worsening the banks’ liquidity. Also aiming to curb inflation, the State Bank of Vietnam has asked commercial banks to limit loans for real estate and securities investments, and tighten consumer credit. The State Bank of Vietnam has urged commercial banks, which provided loans with mortgaged stocks, to ask for more mortgaged assets from clients as stock prices are decreasing.
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If clients cannot give more mortgaged assets, commercial banks have to force them to bargain shares away to terminate credit contracts. As a result, a big volume of money has been flowing from the stock market to commercial banks’ coffers.
 Commercial banks have nearly stopped loaning to securities investors; this is considered one of the main reasons behind the stock market’s continued falls in the last time.  Lacking capital for production and business, which may lead to production stagnation and lower competitiveness, higher unemployment, continued falls of the stock market, are all consequences of the tightened monetary policies. 
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Meanwhile, the Chinese government has put forward six groups of measures to fight high inflation, which include: (1) encouraging production expansion, especially the production of key products like food and foodstuffs (2) controlling tightly industries which use food and foodstuffs as materials (3) strengthening its storage system, controlling imports and exports, stabilising domestic prices. Moreover, it has also thought of measures to give allowances to poor people and control its distribution network to prevent massive price increases. 

(Source: TBKTVN)From: VietnamNetBridge

Economy: Another Fed Rate Cut Anticipated Tuesday

March 15, 2008
By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – Desperate to aid an economy in crisis, the Federal Reserve is ready to deliver yet another big interest rate cut.
Federal Reserve Chairman Ben Bernanke testifies before the House ... 
Federal Reserve Chairman Ben Bernanke testifies before the House Financial Services Committee about the latest measures to heal the U.S. economy, on Capitol Hill in Washington in this file photo from Wednesday, Feb. 27, 2008. Desperate to provide relief, the Federal Reserve is ready to deliver another big rate cut. Just how deep of a cut is something Bernanke and his central bank colleagues will be weighing when they meet Tuesday, March 18. Some economists are predicting a half-point reduction, while investors and others are hoping for a more hefty, three-quarters cut. (AP Photo/J. Scott Applewhite)

How big? One-half of a percentage point, some economists say. Investors and others hope for even more, a three-quarters cut or perhaps a full point, given the turmoil on Wall Street. It will be a close call, Fed watchers say.

The speculation ends Tuesday afternoon after Fed Chairman Ben Bernanke and central bank policymakers have met.

Whatever the decision, for a growing number of analysts, one more rate reduction will not be the lifeline that pulls the country back from the brink of the first recession since 2001.

Experts in this camp believe the economy is shrinking now because of the fallout from the housing and credit debacles. Businesses are shedding jobs, Wall Street is convulsing, energy prices are skyrocketing and people are reluctant to spend. Yet these economists say lower interest rates should help cushion the blows of a recession.

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http://news.yahoo.com/s/ap/20080315/ap_on_bi_ge/
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Bush Warns Against “Overcorrecting” Economy

March 15, 2008
By TERENCE HUNT, AP

WASHINGTON – President Bush on Saturday said the government must guard against going too far in trying to fix the troubled economy, cautioning that “one of the worst things you can do is overcorrect.” Democrats said Bush was relying on inaction to solve the problem.

President Bush gestures while speaking about the economy during ...
President Bush gestures while speaking about the economy during an address before The Economic Club of New York, Friday, March 14, 2008, in New York.(AP Photo/Charles Dharapak)

Bush, in his weekly radio address, said the recently passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter. But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high.

“If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse — and end up hurting far more homeowners than we help,” the president said.

The economy has surpassed the Iraq war as the No. 1 concern among voters in this presidential election year amid big job losses, soaring fuel costs, a credit crisis and turmoil on Wall Street.

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http://news.yahoo.com/s/ap/20080315/ap_on_go_pr_
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Economy Hammered by Toxic Blend of Ailments

March 14, 2008
Almost everything seems to be going wrong for the American economy at once. People are buying less, but most things are costing more. Mortgage rates are rising, the dollar is falling and prices of key commodities like oil are leaping from one record high to the next.
.On Thursday, the dollar plumbed new lows against the Japanese yen and several other major currencies; the price of an ounce of gold jumped above $1,000 for the first time; and lenders raised home loan rates once again. Government figures showed retail sales fell in February as consumers cut back on cars, furniture and electronics.

Stocks fell sharply after the retail sales report was released early in the day, and a large investment fund said it was nearing collapse. The volatility that has defined the market lately continued unabated.

The Standard & Poor’s 500-stock index fell 2 percent in the morning, then rebounded partly in reaction to a report that said banks were nearing the end of subprime mortgage losses. It was up nearly 1 percent in the afternoon before paring that gain to close up 0.5 percent, to 1,315.48 points. The Dow Jones industrial average closed up 35.5 points, to 12,145.74 points.

A toxic blend of economic and financial developments is testing policy makers and lawmakers who are struggling to contain the slump brought on by the collapse of the mortgage market, a downturn that now looks sure to push the economy into a recession. Though current conditions are a far cry from the 1970s, resurgent inflation is raising the threat of stagflation — a condition in which unemployment and the price of goods and services both rise.

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http://www.nytimes.com/2008/03/14/business/14econ.html?_r=1&hp&oref=slogin