Dow Jones Closes Below 11,000

Stocks End Mostly Lower Even As Oil Prices Retreat

(AP)  Wall Street ended a whipsaw day mostly lower Tuesday, as fears of escalating instability in the financial sector kept investors on edge despite a steep retreat in oil. The Dow Jones industrials had their first close below 11,000 since July 2006.

Just days after the government said it would aid Fannie Mae and Freddie Mac if necessary, Federal Reserve Chairman Ben Bernanke told Congress the U.S. economy faces "numerous difficulties." During the day's testimony, Treasury Secretary Henry Paulson also said the Bush administration has no immediate plans to lend money to the mortgage giants or buy their stock.

Shares of Fannie and Freddie - which together hold or back nearly half of all the nation's mortgages - tumbled again.

The stock market did benefit from some bargain-hunting as oil retreated from its near-record levels, but the uncertainty of the financial sector made that recovery hard to sustain. If oil prices stabilize or retreat, consumers might feel more comfortable spending on discretionary items, and in turn help the economy.

"There's definitely a correlation between high energy prices and low consumer spending, and we need that to abate to get us a break," said Kim Caughey, equity research analyst at Fort Pitt Capital Group.

A barrel of light, sweet crude dropped $6.44 to settle at $138.74 on the New York Mercantile Exchange as traders bet that the weak economy in the United States and elsewhere will take its toll on global demand.

While some of the market's most battered bank stocks - including Washington Mutual Inc., Lehman Brothers Holdings Inc., and regional bank First Horizon National Corp. - finished higher Tuesday, most bank stocks gave up their brief rallies by the end of the session.

According to preliminary calculations, the Dow fell 92.65, or 0.84 percent, to 10,962.54. It was the blue chips' lowest close since July 24, 2006; the high price of oil is one of the major reasons the Dow has been trading at nearly two-year lows.

Broader stock indicators ended mixed. The Standard & Poor's 500 index fell 13.39, or 1.09 percent, to 1,214.91, while the Nasdaq composite index rose 2.84, or 0.13 percent, to 2,215.71.

Treasury prices traded higher, but pared earlier gains. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.83 percent from 3.86 percent late Monday.

The Labor Department said Tuesday that core inflation at the wholesale level, which excludes energy and food, ticked up by just 0.2 percent, but that overall wholesale prices jumped by a larger-than-expected 1.8 percent - the biggest gain since November. For the past 12 months, wholesale prices including food and energy showed an increase of 9.2 percent, the largest increase since June 1981.

U.S. consumers have been monitoring their budgets more carefully in the face of higher energy prices, falling home values and an uncertain jobs climate. The Commerce Department reported Tuesday that retail sales edged up by 0.1 percent - a weaker amount than the 0.4 percent increase analysts expected in June. Total sales were dampened especially by plummeting sales at car dealerships.

"The bottom line is, eventually, oil as a commodity is going to react to the overall economy," said Dan Alpert, managing director at the investment bank Westwood Capital.

Among the stronger stocks of the day were Lehman, which rose 82 cents, or 6.6 percent, to $13.22; WaMu, which rose 38 cents, or 11.8 percent, to $3.61; and First Horizon, which rose 85 cents, or 16.9 percent, to $5.89. First Horizon named a new CEO on Tuesday.

But Fannie Mae fell $2.66, or 27 percent, to $7.07, and Freddie Mac fell $1.85, or 26 percent, to $5.26. Treasury Secretary Henry Paulson said that if the government extends financial backing to the two institutions, it will be done "under terms and conditions that protect the U.S. taxpayer."

In a bid to protect Fannie Mae and Freddie Mac, Securities and Exchange Commission Chairman Christopher Cox said to Congress Tuesday that the SEC will broaden existing rules prohibiting naked short selling of banks and broker dealers.

Short-selling is a type of speculation, where a trader sells securities he doesn't own; essentially, it's a bet that a stock will fall. Naked short-selling is when a trader makes such a bet without arranging to borrow the stock first.

Another big decliner was American International Group Inc., which suffered the worst percentage drop in the Dow on Tuesday. AIG shares fell $1.20, or 5.32 percent, to $32 after a Wachovia analyst lowered his rating and earnings estimate for the beleaguered insurer.

General Motors Corp. saw the largest rebound among the 30 Dow stocks after announcing plans to lay off salaried workers, reduce truck production, suspend its dividend and borrow $2 billion to $3 billion as it adjusts to a weakening U.S. market. GM shares rose 46 cents, or 4.9 percent, to $9.84.

The Russell 2000 index of smaller companies fell 2.15, or 0.32 percent, to 662.35.

Declining issues outnumbered advancers by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.86 billion shares.

Overseas, Japan's Nikkei stock average fell 1.96 percent, Britain's FTSE 100 fell 2.42 percent, Germany's DAX index fell 1.91 percent, and France's CAC-40 fell 1.96 percent.

[txgrouch2006]

elemmire wrote
So when the DOW gains 270 in one day, just like it did today, whose fault is that?
--------------------
It''s the "fault" of the startling drop in the price of crude oil yesterday. It has dropped over $10 in two days, because the rapidly deteriorating economy is making the oil speculators worry that nobody will be able to afford gasoline in the near future.

[rosieod4prez]

More of chick-little''s doings.


The sky is falling!

The sky is falling!

[elemmire]

Let us see... are we all agreed that the DOW closing below 11,000 is Bush''s fault? Come on, you know you wanna say yes. So when the DOW gains 270 in one day, just like it did today, whose fault is that?

[txgrouch2006]

Petro49L wrote
Inflation is destroying American economy.
---------------------
Let''s think about something. In a time of inflation - which has been ALL TIME since 1950 - is it better to be a saver or a borrower?

We used to be the world''s largest creditor nation. Then the hyperinflation of the late 1970''s made a mockery of us, as the world repaid their debts with dollars worth one-tenth of the dollars they borrowed.

Fast forward to today. Now WE are the largest debtor nation. In comes inflation - and WE will be the ones repaying the debt with dimes on the dollar.

I guess we LEARNED OUR LESSON.

[tksk53]

LET''S SEE
THE DOW CLOSED AT 11239
IS THAT BELOW 11000 ???
REMEMBER AGAIN BEFORE YOU PUSH THE PUBLISH BUTTON BE SURE OF WHAT YOU WROTE
TO MUCH MISS INFORMATION IS BEING PUBLISHED
EVERY TIME YOU MISS QUOTE SOMETHING SOMEBODY GETS HURT
TKSK53

[beehive21-2009]

It was 10000, still high, for the Bush terms.Oil, the real growth, sparked, by Having ChevronTexaco control the Whitehouse via Bush an Cheney.You think Bush has any concept he sold the people out too, line his and Cheney families pockets with gold at the expense of the People ?

[petro49l]

Inflation is destroying American economy. The Saudis demand $150-200 for a barrel of oil. Their sludge is not worth it. American Oil Companies could erect petroleum rigs to drill off shore, in three months. The Saudis insist it would take ten years. George W. Bush is their bribed puppet. The Western Hemisphere has easily enough oil for the world''s needs. Why fight a war in Afghanistan, Pakistan, Iran, Iraq, Syria, and Lebanon to suit the Saudis and their paranoid dreams?

[noloyalisti]

Don''t cut any conservatives or Republicans ANY slack at all. They got us into this mess starting with the second worst president of all time Raygun. They had no intention of compromising or working with the liberals (which is a complement to be called).

Now that their whole program and ideology has been shown to be a complete failure, they want to work together. HA! Keep them the heck away from my government. If they don''t like that they can leave.

[txgrouch2006]

HERE''S MY SOLUTION.

Go to www.congress.org . Enter your ZIP+4 to get a list of YOUR elected representatives.

CLICK ON EACH NAME, and check the rep''s bio.

VOTE AGAINST anyone who was born 1946-1957.

CLEAN OUT THE BABY BOOMERS. SIXTEEN YEARS OF A BABY BOOMER GOVERNMENT HAS BEEN A DISASTER.

SIXTEEN YEARS IS ENOUGH!

[txgrouch2006]

The reason we have political gridlock in this country is that WE, THE PEOPLE, have allowed ourselves to be baited into this irrational partisan bickering. Rather than solving problems, all we do is argue over "who''s to blame," then we VOTE AGAINST the scapegoat and pretend we solved something.

The result - we have done nothing but ping-pong between the TWO GUILTY PARTIES, and NOTHING IS GETTING DONE.

STOP THE PARTISAN BICKERING. START REBUILDING OUR COUNTRY.

[txgrouch2006]

Gas is $4/gallon, the Dow is below 11,000 with "no reason to believe it won''t continue to fall," banks failing, people can''t sell houses, staggering national debt.

And NOBODY, Democrat or Republican has announced ANY major plan to do ANYTHING about it. Bush made his usual "in denial" speech. The Democrats in Congress are sitting on their hands and doing nothing.

NOBODY IS DOING ANYTHING TO FIX THIS ACCELERATING CRISIS. I haven''t seen such a rapid and plainly visible economic fall since he Carter years.

[hungry1968]

Come on Republicans are you buying this?

Posted by whitemale08 at 10:16 PM : Jul 15, 2008





Of course they are!!

Mindless, brain dead, zombies ALWAYS follow the leader!!

"Brains! Must eat BRAINS!! Must vote republican and eat brains!!"

[whitemale08]

Of course the Dow Jones is around 10,000 and something. That''s where Clinton left it back in 1999.

It''s just a sheer example of how tax cuts for the rich and trickle-down voodoo economic nonsense doesn''t work!

It never has. Everytime one of these Republicans get lucky and some how get selected into the White House our economy immediately tanks...everytime.

And then John McCain gets on television and declares himself a footsoldier for Reagnomics.

How stupid is that? Now he want''s to put Plastic Man Romney on the ticket so he get a chance lay pipe where it hurts and have everybody make $6.50 an hour like his serfs over at Office Depot.

Come on Republicans are you buying this?

[whiskyrocker]

Get ready for the pain

[stn_sage]

The DOW was at 10,587 on the day Bush took office.
Now, near the end of his second term, the DOW is at 10,963.
So, the DOW has netted 376 points during all of Bush''''''''''''''''s Presidency. Great job Bushie!
Posted by Smirk5 at 06:22 PM
-------------------------
My response:
1. Thanks for providing us with the Dow level on Bush''s first day!

2. Currently, it''s '' a wopping'' 376 points higher now than it was then---7 1/2 years later!

3. I predict it''s going down further---maybe a lot further---unless it''s propped up to prevent that from happening!

So much for GOP economic ability, they know as much about running an economy as I do about the mating habits of bugs! And, that ain''t much, folks!

[mcv57]

Jacques Cailloux, Europe economist at the Royal Bank of Scotland, said a "reverse decoupling" is now under way as Europe goes down harder than the US - just as it did after the dotcom bust. "There is loss of momentum across the board. We can''t exclude a recession," he said.

Spain is now spiralling into the worst crisis since the Franco dictatorship. "The economy is in dire straits," said Dominic Bryant, Spain expert at BNP Paribas.

advertisement"Some of the housebuilders are going to go bust, it is as simple as that. Over 10pc of Spain''s economy has been building houses. This compares with 6pc-7pc in the US at the height of the bubble. The adjustment will be enormous," he said.

[mcv57]

"FDIC spokesman David Barr, who was stationed outside IndyMac headquarters, said it could take several years before the agency fully addresses customer claims."

Bank customers are repeatedly told that their savings is FDIC insured, the problems is that until you receive your money from FDIC (if you ever do), you go hungry.

[wardoglrs]

**** about the Repubs your all to Dumb Downed to commit.
The Dems are just as corrupt as the Repubs. You just cant see it can you.

They are both destroying the REPUBLIC if you idoits know what that is. This country is not the America that it was meant to be. It has been stolen long ago and your a commodity like sugar and pork. In other words your nothing and your owned. When you finaly see the truth lets hope its not to late for a revolution but with morons like you people you will just simply roll over like a beaten dog that your are.

[rickstas]

Remember the good ole days when all America had to worry about was a bloe job in the White House?

[sistatee-2009]

Of the 30 companies that comprise the index known as the DOW, the two or three worst performing will be axed and replaced by companies that have fared better, and then like magic, the DOW will be back above 12,000 again.