Stocks Plunge As Oil Hits New High

Dow Jones Industrial Average Drops 358 Points; Oil Tops $140 A Barrel

(AP)  A barrage of bad news including a new record high for oil sent Wall Street plunging Thursday, hurtling the Dow Jones industrials down nearly 360 points to their lowest level in nearly two years.

Oil's surge past $140 a barrel was just one of the day's troubling developments. Warnings of trouble in the key financial, automotive and high-tech industries added up to an increasingly troubled economy.

The Dow closed at its low of the day, down 358.41, or 3.03 percent, to 11,453.42, its lowest finish since Sept. 11, 2006, while all the major indexes lost around 3 percent. The flight from stocks sent investors rushing for the safety of the Treasury market, where prices rose and yields tumbled.

Thursday's confluence of bad news overshadowed the National Association of Realtors' report that existing home sales edged up last month, only the second increase in the past 10 months. It also wiped out any positive impact from the Federal Reserve's widely expected decision Wednesday to leave interest rates unchanged.

Analysts' negative comments on General Motors Corp. sent shares of the largest U.S. automaker to their lowest level in more than 30 years, while Citigroup Inc. fell sharply after an analyst placed a "sell" rating on the stock and warned investors to expect less from the brokerage sector in an uneasy economic climate. Disappointing outlooks from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors' moods and made the tech sector one of the steepest decliners.

The gloom was compounded by an unnerving forecast about oil prices that raised the specter of higher inflation and even more damage to the economy.

OPEC President Chakib Khelil was quoted as telling a French television station that oil could rise to between $150 and $170 per barrel this summer before pulling back later in the year. That and a falling dollar helped send light, sweet crude as high as $140.39 and to a record settlement of $139.64 on the New York Mercantile Exchange. Rising oil has saddled nearly all parts of the economy with higher costs, weighing on consumers who now have to reach much deeper into their wallets at the gas pump and therefore have less to spend elsewhere.

The stream of downbeat assessments drove home to investors how much U.S. companies stand to be hurt from the fallout of the prolonged housing slump, the nearly year-old credit crisis and the soaring price of oil. The great fear on the Street has been that rising prices and worries about their finances will force consumers to further curb their spending, sending the economy into even more of a decline.

The latest reading on the gross domestic product Thursday backed up that fear. The Commerce Department said the economy as measured by GDP rose at 1 percent annual rate in the first quarter, a slight improvement from the previous estimate of 0.9 percent, but still quite anemic. Moreover, the number does not reflect the impact of higher gas and oil prices that shot up further during the second quarter, which ends Monday.

"This is unfortunately kind of a slack period. We're waiting for second-quarter earnings. Until then, we have this very negative attitude among investors and everyone seems to be latching onto negative news and shrugging off the positive news," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, pointing to the uptick in housing sales.

Broader stock indicators also fell sharply, but did not plumb the levels they reached in mid-March. The Standard & Poor's 500 index dropped 38.82, or 2.94 percent, to 1,283.15, and the technology-laden Nasdaq composite index slid 79.89, or 3.33 percent, to 2,321.37.

Bond prices rose sharply. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.06 percent from 4.10 percent late Wednesday.

The dollar was mixed against other major currencies, while the price of gold - an inflation hedge - jumped.

Alexander Paris, economist and market analyst for Chicago-based Barrington Research, said the market's drop appeared technical in nature - that Goldman Sachs' downgrades might have triggered the selling, but that it was aggravated by end-of-the-quarter window dressing, in which institutions' trades are designed to put their portfolios in the best light.

Meanwhile, he added, "second quarter estimates are still declining. There might be some nervousness about the earnings season coming up."

In other economic news Thursday, the Labor Department reported initial jobless claims remained flat last week at 384,000; Wall Street had been looking for a slight decline.

The Realtors, meanwhile, said existing home sales rose 2 percent in May, compared to analysts' forecast of 2.2 percent increase. Few observers believed this was the start of an upward trend in home sales.

[faith_in_w]

I made 5% today. You people are just losers! LOL!

[underdogus10]

BE AWARE-WE STAND AT THE TRESHOLD OF TOTAL RUIN...

[rudy654-2009]

Until something is done about greedy speculators, expect nothing good.

[hypnotoad72]

I made 5% today. You people are just losers! LOL!

Posted by faith_in_w
---------------------

Sell when you can. If the rumors of "bubble" and "burst" are true...

[rudy654-2009]

I just hope that the future will have these speculators holding oil futures and no hope of getting one red cent for them.

[mcvet]

I made 5% today. You people are just losers! LOL!

Posted by faith_in_w at 04:34 PM : Jun 26, 2008
+ report abuse

The Dow fell 358 POINTS today alone!! But this Nazi is doing fine so why are you folks upset?? ROFLMAO You wonder sometimes where these fascist come from... THEY certainly do NOT represent America or what is right out the Nation. Sieg Heil Bush

[faith_in_w]

hypnotoad72, I know and I am going to keep my shares of QID, and SDS along with my Canadian gold miners.

[loneeagle57]

Alright now is the time when we shoot the heads of the oil companies. THERE IS NO EXCUSE FOR THIS. GREED.

[underdogus10]

dumped the dollar and switch into the EURO!

[rudy654-2009]

THEY certainly do NOT represent America or what is right out the Nation. Sieg Heil Bush


--------------------------------------------------------------------------------

Posted by MCVet at 04:41 PM

Yep, they are just like those who plundered the gold of the teeth of dead Jews. My, were they happy all the way to the bank.

[faith_in_w]

rudy654, you think its speculators? Well you are partially correct but why are they speculating there? Could it possibly be a hedge on inflation due to the incredible shrinking dollar value? BTW Gold and silver were way up today as well.

[faith_in_w]

MCVet, thats right. My holdings as of closing yesterday were SDS,QID,AUY,GRS,PMU,GG. Ultra shorts and gold miners.

[sistatee-2009]

If the Fed lowers rates any more, they''ll have to pay people to borrow money. So what they''ll probably do is print up a few thousand tons of worthless paper dollars, add it to the "money" supply through member "banks", and feed it into the starving economy, further diluting the dollar''s value and fueling more inflation. Then the next thing we''ll hear is that the Fed is worried about inflation. Will the insanity EVER END!

[faith_in_w]

underdogus10, that was a good play in 2001. A bit late now..... Canadian dollar is better though.

[underdogus10]

It may not be a bad time to restock your cupboards and check your water supplies......

[acolton1]

These companys and people who trade Oil Futures need to be all thrown in JAIL for articicailly inflating the price of OIL. Its a bunch of POOP that OIL is $140 a barrel, when this Oil Bubble Bursts and the price of oil drops to 70 dollars a barrel these NAZI''s who inflated the price all need to be SHOT and throw in jail. Sure we are using more oil but the jump in price in less than a year does not justify this price surge. its all lies.

[rudy654-2009]

BTW Gold and silver were way up today as well.


--------------------------------------------------------------------------------

Posted by faith_in_w at 04:45 PM

When the working poor can no longer afford the basics, I wouldn''t proudly act like I didn''t care, if I were you.

[singingrick]

Let''s do what the McBush wants and bomb Iran. I wonder what would happen to oil prices then?

[faith_in_w]

SistaTee, wow someone else who actually gets it. BWT, DOW will land just under 11,000 this time.

[imarltool2u]

did the hooker say she made only 5% of what she normally makes on her back and on her knees. you go faith n w, er, i mean gopsoccermom.

[faith_in_w]

rudy654, its their fault for being duped.

[rudy654-2009]

What a combination we have: We have a government gone wild with spending billions upons billions to where they don''t know, nor care, in a war that they lied to get rich off of; then we have speculators driving up futures as a hedge against the weakening dollar, and then we have those in control who just bloody don''t care.

[underdogus10]

PREPARE FOR THE COMING TRIBULATION!!for the third horseman of the Apocalypse.......

[faith_in_w]

imarltool2u, no I said I made 5% on the amount I have invested in stocks today or roughly $55,000.

[rudy654-2009]

rudy654, its their fault for being duped.

Posted by faith_in_w at 04:51 PM

Maybe, maybe not. Saying it won''t help you one bit when they get desperate.

[faith_in_w]

underdogus10, I hear you can bribe all 4 of those guys.

[underdogus10]

grab your soup bowl DEPRESSION A''COMING!!

[faith_in_w]

rudy654, dont plan on being here at that point.

[smirk5]

When Clinton raised taxes in the 90s, we got major economic growth and tons of new jobs. The Bush tax cuts didn''t come close to providing the growth that the economy got out of Clinton. Supply-side economics is dead. It didn''t work.

[antoniof123]

rudy654, its their fault for being duped.

Posted by faith_in_w at 04:51 PM

Maybe, maybe not. Saying it won''''t help you one bit when they get desperate.

Posted by rudy654 at 04:53 PM : Jun 26, 2008

That is right faith when people have nothing to lose they don''t worry about anything including taking a life.

We are going to have problems as long as we allow greed and it seems that the conservatives are the greediest of the bunch.

[underdogus10]

gas prices in Venezuela 15.00 CENTS a gal,Iran about a buck,Mexico around two bucks....

[rudy654-2009]

Posted by faith_in_w at 04:54 PM

If you and your fellow conservative evangelicals think they are going to be lifted up to heaven, I have bad news for you. It aint'' gonna happen. You are on the left side of that equation, sorry to say.

[smirk5]

Last summer, Neil Cavuto was complaining that Bush Jr. wasn''t getting enough credit for the economy. Mr. Cavuto no longer makes this complaint for some reason.

[sistatee-2009]

Thanks, Faith.

[underdogus10]

...and greed corruption, and arrogance got us here!
Posted by truthspeake2 and homosexuality he,he

[noloyalisti]

These neo cons and their right wing fascist oil companies are playing us. Between the Greasy Old Perverts and their buddies in the stock market and big corporate America, we are getting raped.

How much longer do we put up with it?

[smirk5]

Why isn''t Neil Cavuto continuing on with the DOW 14,000 celebration he kicked off last year?

[fstop100]

We need to force the oil companies to fund mass transportation with there profits. It was around 1900 that they went around the country and bought all the trolly car lines and destroyed them.
Think it is time for payback?

[fstop100]

History repeats itself.

truthspeake2 said
"The US is finally going the way of the Roman Empire...and greed corruption, and arrogance got us here!"

[usclimey]

faith_in_w was previously known as gopsoccermom. She was mildly amusing back then, now she''s getting obnoxious.

[fairbalance2]

When will the Democratic party stop bowing down to the left wing environmentalists and let us drill for oil in our country and off shore? Just passing a bill to drill on our soil will slow down the speculators who are helping to drive up oil prices!

[iphyt4u]

So this is the 8th year of republican economic management. I guess tax cuts for the wealthy just doesn''t work. The Democrats have been saying all along, "this Bush guy and his friends are crooks".

[displeased]

Just passing a bill to drill on our soil will slow down the speculators who are helping to drive up oil prices!
Posted by fairbalance2

Maybe for now. But then what?

[rudy654-2009]

We need to force the oil companies to fund mass transportation with there profits. It was around 1900 that they went around the country and bought all the trolly car lines and destroyed them.
Think it is time for payback?


--------------------------------------------------------------------------------

Posted by fstop100 at 05:02 PM

I am so there with you on that. That is exactly what happened in my town. The trolley service was being built to serve the whole area, including neighborhoods. But the oil industry was set on making everybody a part of their auto culture and were successful. In recent years, they have even begun to dig up rails. If they get taxed, and they should, that is where the money has to go.

[rwassel]

fairbalance2 -

Enough with the drill on our own soil BS!

Most economists have already agreed that drilling in ANWR would only lower the price of oil (NOT gas) 50 cents a barrel. Not to mention that it would take YEARS to get all the equipment and infrastructure in place.

Here''s a thought - what if we instead invest in alternate sources of energy? You know, a long-term solution instead of very small bandaid?

Sheesh - I didn''t think people could be this naive...

[loneeagle57]

358 down. and the heads in charge still claim that nothing is wrong. Come on. When will you wake up. the lone great superpower is crumbling. People can''t afford to go to work to make money to go to work. We are being forced out of our homes. The ones who can keep the houses can''t afford to heat them. The rich continue to stomp on the poor. Their day is coming I can''t wait to see the high society snobs in the bread lines.

[vietnam21]

Quick , please call ENVIRO. GROUP and Dems. to fix this problem....

[smirk5]

fairbalance2,
The Republicans if left in executive charge will bomb Iran. Any bombing of Iran and speculation will drive oil way higher than it is today.

[rwassel]

And here''s the proof and research, something you right-wing nutjobs never seem to care about providing when you spout off at the mouth. Take a look at this article, which cites multiple studies...

Yeah, drilling here would at most lower our gas by 6.5 cents per gallon. Yippee...

[sepa2]

Hey people your beloved Reaganomics at work. Imagine if we had followed Carter''s (a looser according to many) advice on energy in 1980( http://www.mnforsustain.org/energy_speec
h_president_carter.htm). All people are looking for is instant returns never mind what happened in the future even as clsoe as 20 years ahead.