Rough Week On Wall Street

Dow Down More Than 4% As Investors React To High Oil Prices And Bad Economic News

(CBS/AP)  Wall Street ended a depressing week with another big loss on Friday, with the Dow Jones industrials falling more than 100 points amid ever-escalating worries about high oil prices and fallout from the credit crisis. The major indexes are all down more than 3 percent for the week.

The Dow has fallen nearly 460 points in the last two days and reached its lowest point since September 2006.

Investors again contended Friday with a seemingly relentless stream of troubling news about the financial sector. Moody's Investors Service said it is reviewing investment bank Morgan Stanley for a possible downgrade. There were also more reports that Merrill Lynch & Co. might have to write off nearly $6 billion of risky mortgage-backed debt.

In addition to anxiety about the financials, the market watched oil's march higher - the price of crude rose to a new record of $142.99 a barrel on the New York Mercantile Exchange. Wall Street remains concerned that higher commodity prices will slam consumers with not only elevated costs for energy and food, but also for other goods if cash-strapped companies decide to pass along the rising costs.

"People are trading with a lot of emotion," said Alexander Paris, an economist and market analyst for Chicago-based Barrington Research. "I think the market is trying to make a bottom, but the question is will it hold there or just crash through. It feels just like the top of the technology bubble in 2000, you know there's something wrong but it is hard to time it."

Financial advisor Michael Kresh told CBS News correspondent Jeff Glor that his advice to investors is to stay calm.

"First thing I tell anybody right now is go to their medicine cabinet and get a little Prozac," says Kresh.

Investors did get a little solace from economic data released on Friday. The Commerce Department said spending rose 0.8 percent in May, as taxpayers started receiving their stimulus checks. The increase was higher than the 0.7 percent economists predicted. The report also said personal incomes surged 1.9 percent - significantly more than anticipated. After taxes, incomes surged 5.7 percent, the largest amount in 33 years.

Investors will still have to wait and see what the long term effects of this monentary injection will be.

"What do consumers do three, four months from now if they're still losing jobs?" Stuart Hoffman, the chief economist at PNC Bank, asks. "And the rebate checks obviously are a one shot deal."

According to preliminary calculations, the Dow Jones industrial average fell 106.91, or 0.93 percent, to 11,346.51, compounding Thursday's 358-point skid. The blue chip index is down 19.9 percent from its record high close of 14,164.53 in October, and is on the verge of the 20 percent pullback that is considered the threshold for a bear market.

Broader stock indicators also closed lower. The Standard & Poor's 500 index fell 4.77, or 0.37 percent, to 1,278.38. The S&P, the index most closely watched by market professionals, is down 18.3 percent from its October high.

The Nasdaq composite index fell 5.74, or 0.25 percent, to 2,315.63.

For the week, the Dow gave up 4.19 percent, the S&P shed 3 percent and the Nasdaq fell 3.76 percent.

Declining issues outnumbered advancers by about 3 to 2 Friday on the New York Stock Exchange, where volume came to 1.4 billion shares.

Bond prices edged higher. The yield on the benchmark 10-year Treasury note, which tends to move opposite its price, was at 3.96 percent, down from 4.03 percent late Thursday. The dollar was lower against other major currencies, while gold prices rose.

In other economic news, the University of Michigan's June index of consumer sentiment came in at 56.4, a bit lower than its reading in May and slightly below the average analyst estimate.

"The problem is that there's not one, single worry," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. He pointed to high gas prices, still-tight credit market conditions, and the contracting housing market. "If you're looking for problems that face investors, that face the U.S. economy, they're everywhere."

Thursday's drop came on a combination of worries about oil prices and the financial, automotive and technology sectors. General Motors Corp. shares dropped to their lowest level in more than three decades.

GM shares rose 12 cents to $11.55 on Friday.

Also Friday, a Lehman Brothers analyst lifted his prediction of Merrill Lynch's asset markdowns in the second quarter. His write-down estimate rose to $5.4 billion from $3 billion. On Thursday, a Goldman Sachs analyst forecast a $4.2 billion write-down at Merrill and a nearly $9 billion write-down at Citigroup Inc.

Merrill shares fell 35 cents to $32.70, and Citigroup shares fell 42 cents, or 2.3 percent, to $17.25.

Morgan Stanley dropped 12 cents to $36.71 after Moody's said the investment bank's "financial performance and risk management has been inconsistent" since credit markets began last year. The company will focus its review on Morgan Stanley's ability to control risk and generate profit over the next one to two years - a period Moody's expects will be challenging for investment banks.

The Russell 2000 index of smaller companies fell 0.28, or 0.04 percent, to 698.14.

Overseas, Japan's Nikkei stock average fell 2.01 percent after Wall Street's tumble. In afternoon trading, Britain's FTSE 100 rose 0.21 percent, Germany's DAX index fell 0.58 percent, and France's CAC-40 lost 0.65 percent.

[marshall_nee]

Bear market!!!!

[gkc99]

Nice work, Bushits! Your hero moron chimp comes through again--record debt for the war Bushit put on a credit card--that was supposed to be paid off by all that cheap Iraqi oil we''d get, wasn''t it.

When someone predicts things and time and time again is wrong wrong wrong, only a retarded idiot would vote for more of the same.

That''s why Repugniscum bushits are voting for John McCain.

[midland666]

You did a fine Job the SHRUBBY!!!!

[marshall_nee]

Thanks Bankers

[vastr-wcon]

.
The market bubble created by the irresponsible actions of Bailout Bernanke is finally starting to deflate. The investment geniuses of Wall Street recently propelled the Dow up on the realization that Bernanke and the Fed is finally beginning to understand what MOST Americans have known for months: the country is in a catastrophic recession coupled with stagflation, it''s getting worse every day, and there is no end in sight to this misery. Of course, since no billionaire fat-cats (like the incompetent Bear Stearns execs) are suffering from this situation, Bernanke and the Fed have chosen to move with the speed and resolve of FEMA in addressing this horrific economic strain on Main Street. That is why, instead of raising interest rates, the Fed just did nothing in the recent meeting.

This situation is just another item to add to the legacy of the WORST PRESIDENT IN AMERICAN HISTORY.

/

[lovegetpeace]

ex-President Jimmy Carter looks a lot better than President Bush.

The Massive Bush''s Tax Cuts of 2001 and 2003 for the super rich was perfect.

Mission Accomplished!

[hypnotoad72]

Globalization cannot be stopped, but if it was about expansion, and not migration, would we be in any problems right now?

[shazam96]

nelson ;You and stockmart wow anyways did you get your porridge for the day nelson boy....smile.

[noloyalisti]

Well, we had to pay for the invasion and occupation eventually. And the salaries of the rich CEOs of the corporations so they can run the government for themselves.

[noloyalisti]

NO, the brainless Limbaugh lovers have their story and they''re sticking to it. They still think that America stands for democracy and freedom. It is socialism for the rich and capitalism for the poor. And "fair" trade for Exxon, Chevron and Walmart (to exploit workers and start wars all over the world). Good job Greasy Old Pervert party of death!!!!

[ponco seno]

ex-President Jimmy Carter looks a lot better than President Bush.

The Massive Bush''''s Tax Cuts of 2001 and 2003 for the super rich was perfect.

Mission Accomplished!



Posted by lovegetpeace at 05:46 PM : Jun 27, 2008




100% better - even with his mistakes which he later acknowledged.

[underdogus10]

quit whining and bite the bullet.....we are going down ...see ya at the soup lines....AAARRRGGHHHH

[underdogus10]

BUSH LET''S ROLL!!! LET''S GO ALL THE WAY!!! BRING THE MUSHROOM CLOUD!! thousand and one degrees!! FRIGGIN Ahmadinejad!! your days are numbered!!

[beehive21-2009]

Why,cry, you should of bought, natural gas ,instead of fast food ,becoming a gas maker.America your all fat,slim down, stop eating like pigs.Arm yourselves, smell smoke on the horizon ?

[vietnam21]

Dems. make me sick.

[gce65]

Burn baby burn!
Disco inferno!

The chickens are coming home to roost...and taking a huge dump on Bush''s head.

[gce65]

"STAY THE COURSE!" (Said the idiot as his car rolled into the ocean)

ha ha ha ha ha ha

[whitemale08]

Republicans: "The Democrats want to cut and run on this economy"

Republicans: "The Deomocrats want surrender dates on the economy"

Republicans: "We stay the course until we achieve victory in this economy"

Republicans: "The U.S. economy is turning the corner"

Republicans: "Economic fundamentals remain strong"

Secratary of Treasury Hank Paulson (Republican): "Our economy is truly a marvel"

Secratary of Treasury Hank Paulson (Republican): "The fundamentals of our economy remain strong"

[sistatee-2009]

This is what happens when a country''s money is worthless. Nine trillion of bad checks written since FDR was in office has finally backed up in our lower colon. The government''s answer; BORROW AND SPEND MORE! Our economy is on life support, and China has its hand on the plug.

[whitemale08]

Here are some more laughing points:

Republicans: "The surge in our economic prosperity is working"

Secratary of Treasury Hank Paulson (Republican): "We have a healthy economy"

...some more laughs from Republican laughing poinsts.

[babooph]

Why did the business "news" not advise us on the oportunity for torture profit. Surely companies supplied the gear & sites-we are not barbaric enough to torture in open fields-Mercedes got their logo off the ovens-who got the new stuff airbrushed?

[whitemale08]

I suggest everyone go to larouchepac.com to get a real insight on what is happening to the economy.

This is where you will learn the difference between "Keynes" economic teachings (garbage) and "Physical" economics (study of economic dynamics)

Sofists believe in economic trends which you can create economic models that have failure rates.

Physical economists believe in scientific dynamics that must be discovered and understood because they never change and there affects are always predictable and cannot be ignored.

[whitemale08]

Our Education system teaches us this Keynesian economics dribble.

It relies on cheerleading by the media and whatever political parties are in power at the time.

In Keynesian economics only growth in debt counts for economic growth.

In Physical economics only growth in production and savings counts.

[whitemale08]

curse914 - I agree with you totally.

His political bias truly revealing so I only listen to his ideas about Physical economics.

But remember he''s a PAC or Political Action Committe who''s committed to funneling PAC money to Hillary Clinton.

Just ignore that and let him teach you real economics.

[whitemale08]

"Money Masters" was my first education video on economics.

Anyone wanting to understand who runs the world and how has to start with "Money Masters"

That''s where you get your foundation and divorce yourself from this Keynesian garbage they teach in college.

[whitemale08]

Ron Paul was probably in the end the last hope for American but his only problem is is that you have to Government credit system to invest in infrastucture but I believe some of his ideas might be taken to the extreme of small government and leave that important part out.

[ontheleft]

We''re already in a bear market. Duh. Things are going to get a LOT worse before they get better.

[whitemale08]

At least Obama believes that Government has a role to provide credit for infrastructure investment and alternative energy investment.

[whitemale08]

Obama - Barr would probably be the best ticket since both believe the war should end and that money be used for domestic priorities and the Barr can check the growth of government spending.

[marshall_nee]

Don''t worry the PPT will save the day!

[feelfree4u]

Dowjones20k...where did you go?

[feelfree4u]

Many will recall that the U.S. stock market was shrinking pretty fast, just prior to the 9/11/01 attacks.

[marshall_nee]

As the old saying goes: "Sell in May and go away."

[whitemale08]

What Larouche fails to mention is that Soros and Warren Buffet backed Hillary early on but now that Obama is the nominee Larouche refuses to acknowledge that fact.

[randynason]

The land of the free and home of the brave is fastly becoming the land of the overinflated and the home of the sniveling, corporate coward. It''s really hard to get very upset over an African dictator stealing an election when we have our own little dictator right here, in our midst. To date, he hasn''t even been impeached. What does THAT say to the rest of the world?!!

[whitemale08]

Hey...just because I hate this economy doesn''t mean I hate America!

[timdgrim]

Mad Max days are coming..and coming soon...

[jaded_jerk]

Waah!Who cares?I wish the S.O.B. would tank completely.Worthless bunch of leeches want all the benefits of america,and our blood and sweat for nothing.

[cold5342060]

People, may say we are heading for a recession, but the way I see it we are in a recession, and heading for a depression, that would make the 1929 crash seem like losing your pocket change. It just seems to me every time someone from the media makes a prediction on gas prices, they just go up. I look foreword to some bad times ahead. Congress does not give a rats behind

[cold5342060]

People, may say we are heading for a recession, but the way I see it we are in a recession, and heading for a depression, that would make the 1929 crash seem like losing your pocket change. It just seems to me every time someone from the media makes a prediction on gas prices, they just go up. I look foreword to some bad times ahead. Congress does not give a rats behind

[mcvet]

Hey...just because I hate this economy doesn''''t mean I hate America!

Posted by whitemale08 at 11:59 PM : Jun 27, 2008
+ report abuse

Really? Tell me you didn''t allow garbage like the Willie Horton Ad to cause you to elect people who have taken us down this road? Go ahead and lie to us! WHEN we stopped being America, when we started voting for people to run our country who were more interested in making sure certain people didn''t live with certain people rather than how the Average American made it from week to week, WE stopped being American... PERIOD!!

[starleo146]

Many will recall that the U.S. stock market was shrinking pretty fast, just prior to the 9/11/01 attacks.

Posted by FeelFree4U at 10:08 PM : Jun 27, 2008
+ rep

John McBush is preaching war, war, war for something, you don''t think he will have a surprise attack on his watch do you?

[b48151]

DRILL HERE DRILL NOW PAY LESS...got that you pathetic libs..over 70% of the country wants this...This will be hung around your necks in Nov.

[ioweign]

DRILL HERE DRILL NOW PAY LESS...got that you pathetic libs..over 70% of the country wants this...This will be hung around your necks in Nov.

Posted by B48151 at 11:15 AM : Jun 28, 2008

And what is your two "Oilmen" of a President and Vice-President Energy Policy. You did know the Executive Branch is responsible for Policy - well in some Administrations. No "Accountability" with this Administration.

"We need an energy bill that encourages consumption." George W Bush - Trenton, N.J., Sept. 23, 2002

[mandydryer]

We blame the greedy republins and the wealthy for all of America''s problems. Join Americans against greed in government. www.theseriouspolice.com