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Stocks zigzag after rally as the dollar rises
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Patrick McManamon: Here's what the Browns should try the rest of the season
Louisville athlete commits to play for Boston College
Family found dead in Ohio home
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Akron vs. Mount Union — Liveblog
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Indians announce spring dates
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Mangini doesn't name a quarterback
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Flashes interested in another Cincinnati player
Cleveland Cavaliers:
Shaq: It’s All About Winning Championships
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Buckeyes Roll 100-60 / Season Outlook
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Report: Walsh baseball player commits
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More On The Fort Hood Jihadist
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Simply Incapable of Telling The Truth
Akron Law Café:
Health Care Financing Reform: (63) Commonwealth Fund Report on Primary Care
See Jane Style:
Muffle Your Muffler
Car Chase:
Clock Tender- Extending the Life of Collector Car Clocks
Let's Talk Real Estate:
Rumors: Akron Starbucks Closing
Ohio Travels with Betty:
Jack is looking for a trip to Southern Ohio the week of November 16.
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Aeromsith looking for new singer as Steven Tyler contemplates solo career
HRLite House:
Personal Rant – Why People Do Not Live in Northeast Ohio
Akron Gamer:
Video: 'Modern Warfare 2' hits the streets
By Sara Lepro
Associated Press
POSTED: 01:30 p.m. EST, Dec 01, 2008
NEW YORK: Confirmation that the nation is in a recession and signs pointing to a prolonged downturn sent Wall Street plunging once again today, hurtling the Dow Jones industrials down more than 440 points and erasing a huge chunk of last week's big gains. All the major indexes fell more than 5 percent.
The market began the day sliding on initial reports that the holiday shopping season, while better than some retailers and analysts feared, was mixed, a sign that Americans are very reluctant to spend. That has Wall Street concerned about the impact of a continuing drop in consumer spending on the sagging economy.
According to preliminary figures released by RCT ShopperTrak, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Black Friday. But some analysts are concerned that Black Friday's results aren't indicative of the rest of the weekend; RCT ShopperTrak is expected to release data for the combined Friday and Saturday period later today.
Meanwhile, downbeat economic reports on the manufacturing sector and construction spending only added to investors' concerns.
The day's news reminded investors, who last week were buying on a burst of optimism, that the economy is still in serious trouble. At midday, Wall Street had confirmation of what everyone has suspected for months, that the nation is indeed in a recession. The National Bureau of Economic Research, considered the arbiter of when the economy is in recession or expanding, said the U.S. recession had begun a year ago, in December 2007.
That assessment made the retail sales figures all the more unnerving.
''Unfortunately, two-thirds of the American economy is based on the spending of the American consumer,'' said Mike Stanfield, chief executive of VSR Financial Services. ''When the consumer pulls back, it's very hard for the economy to gain much traction.''
Investors had been hopeful that last week's rally — when the major indexes shot up by double digit percentages — was a sign that some stability had returned to a market badly shaken by months of discouraging economic data. But analysts expect economic concerns to weigh on the market for some time to come.
''Everyone knows the recession is on us, the question is now will it be short and shallow or long and severe,'' Stanfield said.
Chuck Widger, chief executive of investment management firm Brinker Capital, expects the volatility to continue until investors have better visibility on the future.
''Investors are looking for better data on the economy,'' he said. ''We've got baked in pretty nasty assumptions for the economy this quarter. The markets are looking ahead to the first quarter for data that will confirm or deny the bad news.''
In early afternoon trading, the Dow Jones industrial average fell 441.17, or 5.00 percent, to 8,387.87. The Standard & Poor's 500 index dropped 54.59, or 6.09 percent, to 841.65, while the Nasdaq composite index fell 94.64, or 6.16 percent, to 1,440.93.
Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange, where volume came to 563.29 million shares.
The Russell 2000 index of smaller companies fell 33.41, or 7.06 percent, to 439.73.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.82 percent from 2.92 percent Friday. The yield on the three-month T-bill, considered one of the safest investments and an indicator of investor sentiment, slipped to 0.02 percent from 0.05 percent Friday. The lower the yield, the more anxious investors tend to be.
Both the housing and manufacturing sectors have been suffering for some time, so today's economic reports were ultimately unsurprising, although they added to the market's gloom. The Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity fell to a 26-year low in November. Meanwhile, the Commerce Department said construction spending fell by a larger-than-expected amount in October.
Stanfield also said investors have lost some confidence in recent moves by the government to bolster the financial system. ''The financials are still lagging, which in my opinion shows a lack of confidence in (Treasury Secretary) Paulson and the undertaking of the Fed and the Treasury,'' he said.
Analysts say investors have been frustrated by the government's change in strategy as it implements its $700 billion financial bailout program; the Treasury originally said it would buy soured mortgage debt from banks, then decided to buy stock in the banks. Last week, with the rescue of Citigroup Inc., the government again said it was buying the bank's failed debt.
The government injected a fresh $20 billion into the banking giant and said it would guarantee up to $306 billion of the bank's risky assets.
Citigroup tumbled $1.37, or 17 percent, to $6.92. Morgan Stanley shares dropped $2.68, or 18 percent, to $12.07. Goldman Sachs Group Inc. fell $12.16, or 15 percent, to $66.83.
Retailers were among the day's poorest performers. Wal-Mart Stores Inc. fell $2.31, or 4.13 percent, to $55.37, while JCPenny Co. tumbled $2.05, or 10.80 percent, to $16.94.
Wall Street is also awaiting some sort of resolution for automakers, who return to Washington this week in search of $25 billion in government support. Chrysler LLC, Ford Motor Co. and General Motors Corp. are to submit stabilization plans to Congress on Tuesday. The plans will be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.
Meanwhile, Ford said it is considering selling Volvo Car Corp. Ford said it expects its strategic review of the Swedish luxury carmaker to take several months.
Automakers are scheduled to report November U.S. auto sales on Tuesday.
Light, sweet crude dropped $4.62 to $49.81 a barrel on the New York Mercantile Exchange after OPEC decided not to cut production at an informal meeting in Cairo on Saturday. The Organization of the Petroleum Exporting Countries, which accounts for about 40 percent of global supply, reduced output quotas in October by 1.5 million barrels a day.
The dollar fell against other major currencies. Gold prices also fell.
Overseas, Japan's Nikkei stock average fell 1.35 percent. In afternoon trading, Britain's FTSE 100 was down 5.19 percent, Germany's DAX index was down 5.88 percent, and France's CAC-40 was down 5.59 percent.
NEW YORK: Confirmation that the nation is in a recession and signs pointing to a prolonged downturn sent Wall Street plunging once again today, hurtling the Dow Jones industrials down more than 440 points and erasing a huge chunk of last week's big gains. All the major indexes fell more than 5 percent.
The market began the day sliding on initial reports that the holiday shopping season, while better than some retailers and analysts feared, was mixed, a sign that Americans are very reluctant to spend. That has Wall Street concerned about the impact of a continuing drop in consumer spending on the sagging economy.
According to preliminary figures released by RCT ShopperTrak, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Black Friday. But some analysts are concerned that Black Friday's results aren't indicative of the rest of the weekend; RCT ShopperTrak is expected to release data for the combined Friday and Saturday period later today.
Meanwhile, downbeat economic reports on the manufacturing sector and construction spending only added to investors' concerns.
The day's news reminded investors, who last week were buying on a burst of optimism, that the economy is still in serious trouble. At midday, Wall Street had confirmation of what everyone has suspected for months, that the nation is indeed in a recession. The National Bureau of Economic Research, considered the arbiter of when the economy is in recession or expanding, said the U.S. recession had begun a year ago, in December 2007.
That assessment made the retail sales figures all the more unnerving.
''Unfortunately, two-thirds of the American economy is based on the spending of the American consumer,'' said Mike Stanfield, chief executive of VSR Financial Services. ''When the consumer pulls back, it's very hard for the economy to gain much traction.''
Investors had been hopeful that last week's rally — when the major indexes shot up by double digit percentages — was a sign that some stability had returned to a market badly shaken by months of discouraging economic data. But analysts expect economic concerns to weigh on the market for some time to come.
''Everyone knows the recession is on us, the question is now will it be short and shallow or long and severe,'' Stanfield said.
Chuck Widger, chief executive of investment management firm Brinker Capital, expects the volatility to continue until investors have better visibility on the future.
''Investors are looking for better data on the economy,'' he said. ''We've got baked in pretty nasty assumptions for the economy this quarter. The markets are looking ahead to the first quarter for data that will confirm or deny the bad news.''
In early afternoon trading, the Dow Jones industrial average fell 441.17, or 5.00 percent, to 8,387.87. The Standard & Poor's 500 index dropped 54.59, or 6.09 percent, to 841.65, while the Nasdaq composite index fell 94.64, or 6.16 percent, to 1,440.93.
Declining issues outnumbered advancers by about 9 to 1 on the New York Stock Exchange, where volume came to 563.29 million shares.
The Russell 2000 index of smaller companies fell 33.41, or 7.06 percent, to 439.73.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.82 percent from 2.92 percent Friday. The yield on the three-month T-bill, considered one of the safest investments and an indicator of investor sentiment, slipped to 0.02 percent from 0.05 percent Friday. The lower the yield, the more anxious investors tend to be.
Both the housing and manufacturing sectors have been suffering for some time, so today's economic reports were ultimately unsurprising, although they added to the market's gloom. The Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity fell to a 26-year low in November. Meanwhile, the Commerce Department said construction spending fell by a larger-than-expected amount in October.
Stanfield also said investors have lost some confidence in recent moves by the government to bolster the financial system. ''The financials are still lagging, which in my opinion shows a lack of confidence in (Treasury Secretary) Paulson and the undertaking of the Fed and the Treasury,'' he said.
Analysts say investors have been frustrated by the government's change in strategy as it implements its $700 billion financial bailout program; the Treasury originally said it would buy soured mortgage debt from banks, then decided to buy stock in the banks. Last week, with the rescue of Citigroup Inc., the government again said it was buying the bank's failed debt.
The government injected a fresh $20 billion into the banking giant and said it would guarantee up to $306 billion of the bank's risky assets.
Citigroup tumbled $1.37, or 17 percent, to $6.92. Morgan Stanley shares dropped $2.68, or 18 percent, to $12.07. Goldman Sachs Group Inc. fell $12.16, or 15 percent, to $66.83.
Retailers were among the day's poorest performers. Wal-Mart Stores Inc. fell $2.31, or 4.13 percent, to $55.37, while JCPenny Co. tumbled $2.05, or 10.80 percent, to $16.94.
Wall Street is also awaiting some sort of resolution for automakers, who return to Washington this week in search of $25 billion in government support. Chrysler LLC, Ford Motor Co. and General Motors Corp. are to submit stabilization plans to Congress on Tuesday. The plans will be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.
Meanwhile, Ford said it is considering selling Volvo Car Corp. Ford said it expects its strategic review of the Swedish luxury carmaker to take several months.
Automakers are scheduled to report November U.S. auto sales on Tuesday.
Light, sweet crude dropped $4.62 to $49.81 a barrel on the New York Mercantile Exchange after OPEC decided not to cut production at an informal meeting in Cairo on Saturday. The Organization of the Petroleum Exporting Countries, which accounts for about 40 percent of global supply, reduced output quotas in October by 1.5 million barrels a day.
The dollar fell against other major currencies. Gold prices also fell.
Overseas, Japan's Nikkei stock average fell 1.35 percent. In afternoon trading, Britain's FTSE 100 was down 5.19 percent, Germany's DAX index was down 5.88 percent, and France's CAC-40 was down 5.59 percent.
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