Aesculus gilmus
05-12-2006, 03:35 PM
Dow Ends Down 120, Nasdaq Ends Down 29
Friday May 12, 4:14 pm ET
By Christopher Wang, AP Business Writer
Dow Ends Down 120 at 11,381, Nasdaq Ends Down 29 at 2,244 As Dollar Weakens, Bond Prices Fall
NEW YORK (AP) -- Stocks faced a second day of steep losses Friday as the dollar weakened and bonds prices fell after data showing higher import prices stoked the market's inflation worries. The major indexes declined sharply this week.
A rebound in prices for imported goods further rattled investors already worried about interest rates. Although import prices were flat excluding oil, that did little to soothe concerns about energy costs lifting prices elsewhere.
Plunging consumer confidence also reinforced beliefs that high gas prices at the pumps could choke consumer spending. Meanwhile, Wall Street weighed the importance of an unexpected decline in the trade deficit and cooling oil prices.
Friday's decline in equity markets built on steep losses the previous day, when surging commodities prices compounded anxiety that the Federal Reserve could continue its two-year streak of interest rate hikes. And next week's reports on wholesale and consumer prices could prove troublesome for the inflation picture.
"With commodities prices reaching new highs, people are saying maybe global growth is stronger than anticipated," said Brian Gendreau, investment strategist for ING Investment Management. "I think that ... has put more Fed tightening in the back of people's minds. The market hates the idea of open-ended increases."
According to preliminary calculations, the Dow lost 119.74, or 1.04 percent, to 11,380.99. The Dow sank 142 points in Thursday's session, its biggest single-day drop since falling 213 points on Jan. 19.
Broader stock indicators also retreated. The Standard & Poor's 500 index fell 14.68, or 1.12 percent, to 1,291.24, and the Nasdaq composite index dropped 28.92, or 1.27 percent, to 2,243.78.
I am posting this to say once again that the stock market has nothing to do with the state of the U.S. economy. The other day someone was licking their chops thinking the Dow Jones was about to set a new nominal record (although it would have to reach nearly 14,000 to do so in inflation-adjusted terms) above 11,723. I think the stock market may have peaked for a while, but that doesn't mean much of anything in terms of the overall economy. Everybody has their own individual economy. If your neighbor is out of work, it's a recession. If you are out of work, it's a depression. Otherwise, things are okay.
Friday May 12, 4:14 pm ET
By Christopher Wang, AP Business Writer
Dow Ends Down 120 at 11,381, Nasdaq Ends Down 29 at 2,244 As Dollar Weakens, Bond Prices Fall
NEW YORK (AP) -- Stocks faced a second day of steep losses Friday as the dollar weakened and bonds prices fell after data showing higher import prices stoked the market's inflation worries. The major indexes declined sharply this week.
A rebound in prices for imported goods further rattled investors already worried about interest rates. Although import prices were flat excluding oil, that did little to soothe concerns about energy costs lifting prices elsewhere.
Plunging consumer confidence also reinforced beliefs that high gas prices at the pumps could choke consumer spending. Meanwhile, Wall Street weighed the importance of an unexpected decline in the trade deficit and cooling oil prices.
Friday's decline in equity markets built on steep losses the previous day, when surging commodities prices compounded anxiety that the Federal Reserve could continue its two-year streak of interest rate hikes. And next week's reports on wholesale and consumer prices could prove troublesome for the inflation picture.
"With commodities prices reaching new highs, people are saying maybe global growth is stronger than anticipated," said Brian Gendreau, investment strategist for ING Investment Management. "I think that ... has put more Fed tightening in the back of people's minds. The market hates the idea of open-ended increases."
According to preliminary calculations, the Dow lost 119.74, or 1.04 percent, to 11,380.99. The Dow sank 142 points in Thursday's session, its biggest single-day drop since falling 213 points on Jan. 19.
Broader stock indicators also retreated. The Standard & Poor's 500 index fell 14.68, or 1.12 percent, to 1,291.24, and the Nasdaq composite index dropped 28.92, or 1.27 percent, to 2,243.78.
I am posting this to say once again that the stock market has nothing to do with the state of the U.S. economy. The other day someone was licking their chops thinking the Dow Jones was about to set a new nominal record (although it would have to reach nearly 14,000 to do so in inflation-adjusted terms) above 11,723. I think the stock market may have peaked for a while, but that doesn't mean much of anything in terms of the overall economy. Everybody has their own individual economy. If your neighbor is out of work, it's a recession. If you are out of work, it's a depression. Otherwise, things are okay.