Wall Street Caps Worst Week In 5 Years

Dow Jones Industrials Drop More Than 500 Points Over 2 Days

(CBS/AP)  Wall Street extended its steep decline Friday, propelling the Dow Jones industrials down more than 500 points over two days after investors gave in to mounting concerns that borrowing costs would climb for both companies and homeowners. It was the Dow's worst week in nearly five years.

Investors cast aside a stronger-than-expected read on the economy and maintained negative sentiment that dominated Thursday when the market shuddered amid worries over the U.S. mortgage and corporate lending markets. Investors globally took flight from equities, shifting cash into safer investments in Treasurys.

Although the market has often rebounded after a steep drop — and has done so in recent weeks — investors appeared unable Friday to set aside their concerns about a weakening housing market and tightening credit.

Still, a lot of investors aren't concerned — and, as CBS News correspondent Kelly Wallace reports, they have history on their side. From 1985 to 2006, the Dow grew an average of 8.6 percent per year. If you had invested $1,000 back then, you'd have more than $15,000 today.

The next big economic report, which Wallace says could play a role in how the market fares, is the unemployment rate, which comes out on Aug. 3.

But a Commerce Department report that the U.S. gross domestic economy rose at a better-than-expected pace in the second quarter appeared to do little to quell investors' unease Friday. GDP increased at a 3.4 percent annual rate, indicated that the drag from the housing sector lessened. Economists had expected an increase of 3.3 percent.

Although the GDP reading might have reassured investors that the economy was more than holding up, even with soaring fuel prices, it also raised the possibility that the Federal Reserve, ever vigilant about inflation, might lean toward raising interest rates. Higher rates would exacerbate the market's intensifying concerns about credit.

"I think people are really cautious right now. We're seeing the convergence of a whole host of sort of unrelated or only slightly related issues," said Randy Frederick, director of derivatives at Charles Schwab & Co. He contends market volatility will remain as investors sort through issues such as the availability of credit for corporate buyouts, soured subprime mortgages and rising energy prices.

The Dow fell 208.10, or 1.54 percent, to 13,265.47. Broader stock indicators also fell: The Standard & Poor's 500 index fell 23.71, or 1.60 percent, to 1,458.95, and the Nasdaq composite index fell 37.10, or 1.43 percent, to 2,562.24.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to a heavy 2.27 billion shares compared with a record 2.78 billion shares on Thursday.

Bonds added to a huge advance logged Thursday as investors clearly sought the relative safety of Treasurys. The yield on the benchmark 10-year Treasury note fell to 4.77 percent from 4.79 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude settled up $2.06 at $77.01 per barrel on the New York Mercantile Exchange, just a penny shy of the record close seen last summer.

Investors seemed little moved by a stronger-than-expected consumer sentiment reading. The Reuters/University of Michigan index rose to 90.4 in July from 85.3 in June.

"I think we're going to have continued sideways movement with 100 point up-and-down days," said Frederick, referring to the Dow's back-and-forth movements. The Dow has vacillated between posting gains and losses in the past eight sessions and only last week traded above 14,000 for the first time. The blue-chip index now is now roughly 650 points below the trading high of 14,021.95 it set only last week.

"The 14,000 level is going to be tough for this market to get back above," Frederick said.

Still, he said investors shouldn't overreact to the moves, in part because of the gains stocks have logged this year. Before Thursday's decline, the Dow was up 10.6 percent for the year, while the S&P had gained 7.04 percent and the Nasdaq 9.64 percent.

"You look at a 300-point Dow day and it seems like a big day, but from a percentage viewpoint it's not a big move," Frederick said.

The volatility that has taken up residence on Wall Street in recent days has perhaps exacerbated concerns of investors grown accustomed to the largely calm markets of recent years. The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped Thursday and rose again Friday.

"My basic belief is that we're in an environment where we're going from extremely low volatility toward normal — from extremely low credit spreads and perception of risk toward normal," said Bart Geer, portfolio leader of the $3.9 billion Putnam Equity Income Fund.

"You can't have all bull markets all the time. Markets go up and go down. The reason you're well paid in equities is because they do. This is all part of the process."

There was little corporate earnings news for traders to mull over, with about half the Standard & Poor's 500 index already having posted results over the past few weeks. The biggest earnings news came from Chevron Corp., which reported second-quarter profit climbed 24 percent to surpass analyst estimates as the second largest U.S. oil company cashed in on higher gasoline prices. Chevron fell $2.26, or 2.6 percent, to $85.20.

Evidence that not all private-equity deals have screeched to a halt came as Lee Equity Partners LLC struck a deal to acquire retailer Deb Shops Inc. for about $391.1 million. Deb fell 17 cents to $26.51.

Also, medical device maker Medtronic Inc., seeking to expand its spinal products business, said it would acquire device maker Kyphon Inc. for $3.9 billion. Kyphon jumped $12.92, or 24 percent, to $66.60. The stock rose as high as $68.40, moving above its previous 52-week high of $57.10. Medtronic slipped 11 cents to $50.81.

The Russell 2000 index of smaller companies fell 13.65, or 1.72 percent, to 777.83.

Most Asian markets fell Friday in reaction to the market plunge, while European markets — which were open during part of the big U.S. drop Thursday — showed more modest moves Friday. Japan's Nikkei stock average closed down 2.36 percent, while the often-volatile Shanghai composite eased lower by 0.03 percent. Britain's FTSE 100 fell 0.58 percent, Germany's DAX index dropped 0.76 percent, and France's CAC-40 fell 0.55 percent.

[toolmangler-2009]

Oh yeah I forgot to mention, prior to 911, Warren Buffett bought 1/3 of the worlds silver supply to stabilize the market while they play out their Project For A New American Century Plan.
Posted by MrHoppy at 01:30 AM : Jul 28, 2007


To quote Warren Buffett: "You should profit from folly, not participate in it"

[normsw]

god, what a bunch of loonies posting "comments".
It's obvious Wall St. is a band of pirates who'll sell their mother for a buck. The whole market operates on rumor, fear and hysteria and stock prices are controlled by a handful of super-rich investment houses and fund managers, all of them morally bankrupt. Put your money in gold and gems if you expect to keep it.

[feelfree1]

MrHoppy,

Re: "Gold prices somehow magically fall with stocks... NOT Possible in a free market and didn't happen until Rothschild sold the gold fixing a few years ago."

Couldn't this come as a result of people selling gold to cover their bad equity bets, and others selling to use for bargain hunting?

Re: "Oh yeah I forgot to mention, prior to 911, Warren Buffett bought 1/3 of the worlds silver supply to stabilize the market while they play out their Project For A New American Century Plan."

Interesting. I had not heard this one. Do you have a source for this?

[mrhoppy-2009]

Shut up snide grass! You are not a poet, you are a Jewish shill working for the Bush Administration.

You useless trolling everyday only makes us more determined to export you to Israel.

[mrhoppy-2009]

Oh yeah I forgot to mention, prior to 911, Warren Buffett bought 1/3 of the worlds silver supply to stabilize the market while they play out their Project For A New American Century Plan.

Now is a good time to trade people like that your soon to be worthless paper Federal Reserve Notes for his pre 1966 90% silver coins.

In the end, you have the money and he has worthless currency that is not even good to wipe his *** with.

(The federal Reserve is a private banking corporation and the dollar the treasury prints for them is just like a bank check of no tangible value)

[tnt1954]

its fryday night, a hot time in the old
town and new town and downtown and midtown
and sleepy town tonite. o little town
of mecca, ca is groovin and moovin.
moo cow. kraal? king solomon's mines?
recommend black people evacuate to pacoima.
dream girls nice spot up there. most
wives have run in the river of salmon.
stay up all night, watch billion wives
get raped by savages gone 'free'.

[tnt1954]

mohawk tribe who build new york city, demand
deflation. all ye who live there, in nice
cages provided by mohawk nation. you all
behave in those cages now. no messing around.
pray real well. apache nation just kinda
gettin into carnations. at non-native indigenous
americans funerals. how sad, que lastima
lo siento. native americans madder than
africanized bees. look around you boy.
sioux nation. sue bee? who sue who now?
never pay, just jilt like tilt. no like
basketball. indians use wilt chamberlains
head for ball. lacrosse. indians very savage.
throw women in volcanoes to temper gods. but
its cool.

[mrhoppy-2009]

500 point drop and just before it did, the media was saying "Still time to get in because it will go higher." This always happens, the Jews on wall street get the Jews that control the media to get you to buy stock that they are going to soon make worth less.

How can they control the market? Roughly 50% of all stock is owned and held by 71 brokerage firms.

Gold prices somehow magically fall with stocks... NOT Possible in a free market and didn't happen until Rothschild sold the gold fixing a few years ago.

How to get even with them for suppressing the price? Simple, buy a lot of gold and silver and take posession of the metal.

You want to do that anyway since their is a measure in the patriot act to allow your local banker to take your gold and silver from your safety deposit box. You can forget about getting the metal from a storage vault. Their system is a means to an end and it is just a matter of time before you win big. Last time silver went up big, 40 to one increase.

[jetranger7]

Hey, can I just Borrow some *** Money "$$$$", so I can fill up my Truck to get to work so I can make my Miniumn wage job, because the US has shipped a lot of Manufacturing jobs overseas to China or Mexico or India. I mean no wonder theres a mortage mess, and people are defaulting on their homes, when these Corporate Idiots and Dumb Azz Government Trade representaives allow and encourage US Companies to move overseas and Outsource Good American Jobs, so the CEOs, can live on their luxury Yachts and buy off politicians ! Time to Boycott anything made in China, Mexico , India, Sri-Lanka, Indionisia! Were headed for a Disaster, actually were in the beginning stages of it right now ! Say NO to NAFTA, GATT & the WTO !

[fascistusa]

Tip of The Iceburg.

ZEITGEISTmovie.com.

The SECRETS are coming out. The Elite (Congress, Rockerfellers, Gates, Waltons, CEOs, ect..) are about to make Us (The Poor) hurt. We're too close to REVOLUTION.

Everything the Corporate Media reports is a LIE or Completely BIASED.

[ubrew12]

Gosh ***. The recession wasn't supposed to start until the Dems owned the White House.

Quick, someone set off a bomb somewhere so we can double the debt again...

[tnt1954]

cameron diaz, famous cuban spy has a hold
of rothschild now by the yin and yang.
so, expect a rocky ride with rocky road
ice cream. bumps and grinds. the pavement
is not all asphalt in the asphalt jungle.
so anyway, she thinks he's hooked like
the marlin .22 rifle i used to own, for
target shooting. but my dad, fearing
me, gave it to the handyman in exchange
for a cupboard for the microwave oven.
foolish knave. when the old dude almost
died of alcoholism at age 67, i got the
crackpot into the hospital so he could
get sober. and he's been sober 17 years.
thank god. i dont' have to around seeing
if his vodka bottles are hidden in the
garage, and take care of him when
he goes into alcoholic blackouts.
still alive at 84. when a person
mind fails them, you are supposed to take
care of them. by family. we did the
same thing for grandma gault. she passed
away on veteran's day 1982, her husband's
birthday, held the torch for him all her life.
paul gault. lt. commander in us navy.
i never met him, he died in 1946. if not
for clemmie, i woulda probably washed
up in the washing machine, and gotten cooked
in the oven, when my ma, made a mistake.
i was almost the goose that got cooked by
accidentally on purpose. kids have to learn
to duck real early in life, and find a place
to hide from mr. and mrs. hyde.

[tnt1954]

well it's friday night again. evening temple
services. then tomorrow its the sabbath.
as chief of the soviet secret service i
am exempt from going to any religious services,
i can watch it on tv. my favorite telepreacher
is shirley phelps-roper. or is it roper-phelps
mister phelps. times of i spy starring bill
cosby and bob culp. black and white tv,
and the annhilation of africa as the cia
and kgb vie for natural resources. how
assinine. pirate capitalism is no way to
run a planet. you people are all crazy.
in the pirate movie i am watching now,
pirates of the blackhawk, the sicilians
are fighting the corsicans for control
of sicily and to have a good king hector.
hector wins, and then the hero and the
heroine,drift off in some boat and love
happily ever after. soviet movies
were better though. they had all the propaganda
movies too. hedging bets eh rothschild?
five on finland to win? then they had
five on everyone to win, and five on everyone
to lose too. what a bunch people with
no character whatsoever. yay shirley.
and shirley temple.

[goldesprit]

"From 1985 to 2006, the Dow grew an average of 8.6 percent per year. If you had invested $1,000 back then, you'd have more than $15,000 today."

If we were all the "you" described above,the mechsnics and numbers would not work out at all.

Phrases like that are misleading by design.

If you had invested ANYTHING differently "back then" the whole world would be different.

[gkc99]

Quick! Pass another tax cut for the billionaires!

They're not making as much money separating the sucker (i.e., middle) class from its money!

Bushit rushes to the rescue of his owners like a faithful dog!

And be sure to veto that health care for children, Bushit! The insurance companies might not like it.

[radiob-2009]

A whopping 5% decline for the week and a 5.4% decline from its high.This is not even a buying opportunity.Use old metrics of PE to evaluate stocks along with cash flow, balance sheets and place your orders with GTC (good till cancelled) on the stocks you chose. A freebee buy AMGN at $50 and hold. You will not regret it.

[tnt1954]

as the chief of the soviet secret service
who believes in god more than you do, christ
was a communist, early church in acts
said share and share alike, case of ananias
and sapphira, killed by the holy spirit
for not sharing, may it go the cellar,
like go to 00 zero on the roulette wheel
of life, and american roulette sell it
to murdoch. so he can be mercenary some more
with rothschild investments. financing
revolution here, piracy there, killings uptown,
downtown, so he can play god. what a child
of wrath. the seven seals have been poured.
he thinks we're all his little tinker toys
to play with. time for red indians now
mr. bond? time for cops and robbers?
how about a nice round of monopoly? and
rothschild's own free parking. but its
false advertising, it costs 5000 dollars
each to get out of the lot. free to get
in, just try and get out of the parking lot.

[shanev137]

hey speakinup...let me know when you want to talk about what your sugardaddy bush has done to the value of the dollar.

[lastdance2]

RE : speakinup
For You - and - All that you Belive in:

It was under the Clinton Administration.

That former : Defense Secretary Rumsfeld - Was involved in selling
a Nuclear Plant to : North Korea
Along with the technology to refine : Uranium and produce Plutonium.
The main ingredients of a : Nuclear Weapon

More nuclear power plants in China
More "Nuclear Bombs" In China
More "Nuclear Missiles " In China

China allied to : %u201CNorth Korea%u201D allied to %u201CSyria%u201D allied to: %u201C Iran%u201D
Each Country - Hostile to the - United States
Now ! ! - All exchanging Nuclear Weapon Technology

Good old fashioned - American - Patriotism
Demonstrated By :
Criminal Corporate America
The Bush - Cheney Administration
The Republican Party
(speakinup)

There was a time when : "Treason"
was a : Criminal Offense

Lastdance

[feelfree1]

Re: "Wall Street Plunges Again"

Update from the Bush regime:

"No it didn't, and those who continue to make this claim are members of al-CIA'da sleeper cells who hate freedom, and fly planes into buidlings. They have also been "linked" to the catastr...er, I mean "terrorists" in Iraq."