from http://www.nytimes.com/
July 6, 2008
Op-Ed Columnist
An Ideal Husband
By MAUREEN DOWD
This weekend, we celebrate our great American pastime: messy celebrity divorces.
There’s the Christie Brinkley/Peter Cook fireworks on Long Island and the Madonna/Guy Ritchie/A-Rod Roman candle in New York.
So how do you avoid a relationship where you end up saying, “The man who I was living with, I just didn’t know who he was” — as Brinkley did in court when talking about her husband’s $3,000-a-month Internet porn and swinger site habit? (Not to mention the 18-year-old mistress/assistant.)
Father Pat Connor, a 79-year-old Catholic priest born in Australia and based in Bordentown, N.J., has spent his celibate life — including nine years as a missionary in India — mulling connubial bliss. His decades of marriage counseling led him to distill some “mostly common sense” advice about how to dodge mates who would maul your happiness.
“Hollywood says you can be deeply in love with someone and then your marriage will work,” the twinkly eyed, white-haired priest says. “But you can be deeply in love with someone to whom you cannot be successfully married.”
For 40 years, he has been giving a lecture — “Whom Not to Marry” — to high school seniors, mostly girls because they’re more interested. “It’s important to do it before they fall seriously in love, because then it will be too late,” he explains. “Infatuation trumps judgment.”
I asked him to summarize his talk:
“Never marry a man who has no friends,” he starts. “This usually means that he will be incapable of the intimacy that marriage demands. I am always amazed at the number of men I have counseled who have no friends. Since, as the Hebrew Scriptures say, ‘Iron shapes iron and friend shapes friend,’ what are his friends like? What do your friends and family members think of him? Sometimes, your friends can’t render an impartial judgment because they are envious that you are beating them in the race to the altar. Envy beclouds judgment.
“Does he use money responsibly? Is he stingy? Most marriages that founder do so because of money — she’s thrifty, he’s on his 10th credit card.
“Steer clear of someone whose life you can run, who never makes demands counter to yours. It’s good to have a doormat in the home, but not if it’s your husband.
“Is he overly attached to his mother and her mythical apron strings? When he wants to make a decision, say, about where you should go on your honeymoon, he doesn’t consult you, he consults his mother. (I’ve known cases where the mother accompanies the couple on their honeymoon!)
“Does he have a sense of humor? That covers a multitude of sins. My mother was once asked how she managed to live harmoniously with three men — my father, brother and me. Her answer, delivered with awesome arrogance, was: ‘You simply operate on the assumption that no man matures after the age of 11.’ My father fell about laughing.
“A therapist friend insists that ‘more marriages are killed by silence than by violence.’ The strong, silent type can be charming but ultimately destructive. That world-class misogynist, Paul of Tarsus, got it right when he said, ‘In all your dealings with one another, speak the truth to one another in love that you may grow up.’
“Don’t marry a problem character thinking you will change him. He’s a heavy drinker, or some other kind of addict, but if he marries a good woman, he’ll settle down. People are the same after marriage as before, only more so.
“Take a good, unsentimental look at his family — you’ll learn a lot about him and his attitude towards women. Kay made a monstrous mistake marrying Michael Corleone! Is there a history of divorce in the family? An atmosphere of racism, sexism or prejudice in his home? Are his goals and deepest beliefs worthy and similar to yours? I remember counseling a pious Catholic woman that it might not be prudent to marry a pious Muslim, whose attitude about women was very different. Love trumped prudence; the annulment process was instigated by her six months later.
“Imagine a religious fundamentalist married to an agnostic. One would have to pray that the fundamentalist doesn’t open the Bible and hit the page in which Abraham is willing to obey God and slit his son’s throat.
“Finally: Does he possess those character traits that add up to a good human being — the willingness to forgive, praise, be courteous? Or is he inclined to be a fibber, to fits of rage, to be a control freak, to be envious of you, to be secretive?
“After I regale a group with this talk, the despairing cry goes up: ‘But you’ve eliminated everyone!’ Life is unfair.”
Coming back from an interesting Jul 4th in DC - fireworks were fantastic with a booming spectacular finale! Hey Maureen, are you going to publish "An Ideal Wife" next? Isn't the institution of marraige itself worth questioning? (that might be the more appropriate NY TIMES article). Marraige was a necessity when men, women and children worked isolated farms and depended on each other to an extent that modern society cannot fathom. Is it a necessity now? I know a happy couple together for the last 15 years who are not married. Just askin!
Sunday, July 6, 2008
Friday, July 4, 2008
Thursday, July 3, 2008
Unemployment claims rise over 400K
Thursday, July 03, 2008
Unemployment Claims Over 400K
by CalculatedRisk
First a correction: last week I mentioned that historically weekly claims increase after Congress passes an extension to unemployment insurance benefits. In the past, workers who had exhausted their benefits could reapply for extended benefits, and these workers were included in the first time claims report. Although the above was true during previous downturns, the DOL BLS has apparently changed their methodology and the extended benefits are not included in first time claims anymore.So the jump to 400K first time claims is not the result of Congress extending benefits (and it would be too soon anyway).Here is the current report from the Department of Labor for the week ending June 28, showing initial unemployment claims increased to 404,000, and the 4-week moving average was 390,500.
This graph shows the weekly claims and the four week moving average of weekly unemployment claims since 1989.
The four week moving average has been trending upwards for the last few months, and is now at 390,500 - solidly above the possible recession level (approximately 350K).
This graph shows the weekly claims and the four week moving average of weekly unemployment claims since 1989. The four week moving average has been trending upwards for the last few months, and is now at 390,500 - solidly above the possible recession level (approximately 350K).
Thank you again CR and Tanta for all the work you do. Calculated Risk listed in the blogroll is one of the best (if not THE best) economics blog out there. Unemployment is rising. As laid of workers retrain, for profit Education stocks will rise. Please do your own research. This is not a recommendation to buy or sell anything. This blog is not responsible for losses.
Unemployment Claims Over 400K
by CalculatedRisk
First a correction: last week I mentioned that historically weekly claims increase after Congress passes an extension to unemployment insurance benefits. In the past, workers who had exhausted their benefits could reapply for extended benefits, and these workers were included in the first time claims report. Although the above was true during previous downturns, the DOL BLS has apparently changed their methodology and the extended benefits are not included in first time claims anymore.So the jump to 400K first time claims is not the result of Congress extending benefits (and it would be too soon anyway).Here is the current report from the Department of Labor for the week ending June 28, showing initial unemployment claims increased to 404,000, and the 4-week moving average was 390,500.
This graph shows the weekly claims and the four week moving average of weekly unemployment claims since 1989.The four week moving average has been trending upwards for the last few months, and is now at 390,500 - solidly above the possible recession level (approximately 350K).
This graph shows the weekly claims and the four week moving average of weekly unemployment claims since 1989. The four week moving average has been trending upwards for the last few months, and is now at 390,500 - solidly above the possible recession level (approximately 350K).
Thank you again CR and Tanta for all the work you do. Calculated Risk listed in the blogroll is one of the best (if not THE best) economics blog out there. Unemployment is rising. As laid of workers retrain, for profit Education stocks will rise. Please do your own research. This is not a recommendation to buy or sell anything. This blog is not responsible for losses.
The New Bull market - Step 1 in place?
from the Stock Traders Almanac
www.stocktradersalmanac.com
Start Looking for a Serious Buying Opportunity
7/3/2008
It has by our reckoning, officially begun. The first key element necessary for the next major bull market is in place. It has nothing to do with the dollar, P/Es, market internals or any measurable metric; though many are negative. It has to do with the way things “feel” on Wall Street as well as Main Street. The talking heads have shifted their bias from Mister Rogers’ eternal optimism to Chicken Little’s the sky is falling. Financial newspapers and business sections have started featuring “how to survive a bear market” pieces on their front pages. Even casual observers of the tape have begun to opine about the nascent bear market they heard about on the local news. Slow to change their tune, but intractable once they do, the media is now in the bear camp. They have confirmed what most savvy investors have known for quite some time, the economy stinks and we have been in a bear market since October 2007. For investors who have spent the past year or so either on the sidelines or not fully invested this is a positive development. Once the main stream starts to worry about the market, we start looking for an entry point. Negative public sentiment is now in control. Sentiment gauges such as CBOE’s Equity Put/Call Ratio and Volatility Indices have not reached extreme negative levels, but readings on the percent of Advisors Bullish and Bearish have.
Currently, there are 31.9% Advisors Bullish and 44.7% Bearish. Investors Intelligence’s Mike Burke reminds us that these readings are similar to the levels we reached back at the October 2002 bottom.The best buying opportunity won’t likely occur until later this summer or in the fall. It is obviously impossible to pick bear market bottoms. People who say that they pick an exact bottom (or top for that matter) are either lucky or lying.In order to spot the level which a bottom might be put in, there is a methodology that we have developed. Refer to the Proving Grounds in your June 2002 issue. In a nutshell, there are two primary scenarios; forced bottoms and natural bottoms. A “forced” bottom occurs when an extrinsic event forces a major sell off resulting in investor capitulation. The other type of bottom on Wall Street is the “natural” bottom. These bottoms occur when a weak economy runs its course, when stock prices get sufficiently cheap, when sentiment just can’t get any worse, or when all these things happen. In both instances volume is the key. We are not there yet, we have merely begun the bottoming process. It could take three weeks, three months or more. The point is that now is the time to start figuring out what to jump on when the time is right. Generally the sectors that have been brutalized the most during the market downturn is a good place to start. Financials and Real Estate are currently at the top of that list. Contrarian investing is tricky. To succeed you need to trust yourself and filter out the noise. It is an election year so there will be no shortage of public outcry about the state of the markets. It is going to get worse before it gets better. When it can’t get any worse, it will. When the recovery is nowhere in sight, it has probably already begun. When everyone is asking if they should sell, it is probably time to buy. Happy Birthday America! Have a safe and enjoyable holiday.
Jeffrey A. Hirsch, Editor
J. Taylor Brown, Director of Research
This article is entirely accurate but in my humble opinion about 8-12 months too early. We still have a ways to go in this bear market. The average joe is pessimistic because this is a consumer led recession. Joe knows and has known for a while that things are bad. The market is only confirming what Joe has known. To expect that the market will overcome the dual forces of inflation and consumer slowdown (aka stagflation) in the near term or mid term future is being premature. I agree that at some point this will end and some amazing buying opportunities will exist. We're just not there yet. We've had just ONE bear market rally so far. There will be atleast 3 or 4 such false rallies which will exhaust all bullish sentiment. And when everything seems darkest.... Mr. Hirsch and Mr. Brown - you do great work with your research. Your semi-monthly bulletins are eaglerly awaited. Thank you.
www.stocktradersalmanac.com
Start Looking for a Serious Buying Opportunity
7/3/2008
It has by our reckoning, officially begun. The first key element necessary for the next major bull market is in place. It has nothing to do with the dollar, P/Es, market internals or any measurable metric; though many are negative. It has to do with the way things “feel” on Wall Street as well as Main Street. The talking heads have shifted their bias from Mister Rogers’ eternal optimism to Chicken Little’s the sky is falling. Financial newspapers and business sections have started featuring “how to survive a bear market” pieces on their front pages. Even casual observers of the tape have begun to opine about the nascent bear market they heard about on the local news. Slow to change their tune, but intractable once they do, the media is now in the bear camp. They have confirmed what most savvy investors have known for quite some time, the economy stinks and we have been in a bear market since October 2007. For investors who have spent the past year or so either on the sidelines or not fully invested this is a positive development. Once the main stream starts to worry about the market, we start looking for an entry point. Negative public sentiment is now in control. Sentiment gauges such as CBOE’s Equity Put/Call Ratio and Volatility Indices have not reached extreme negative levels, but readings on the percent of Advisors Bullish and Bearish have.
Currently, there are 31.9% Advisors Bullish and 44.7% Bearish. Investors Intelligence’s Mike Burke reminds us that these readings are similar to the levels we reached back at the October 2002 bottom.The best buying opportunity won’t likely occur until later this summer or in the fall. It is obviously impossible to pick bear market bottoms. People who say that they pick an exact bottom (or top for that matter) are either lucky or lying.In order to spot the level which a bottom might be put in, there is a methodology that we have developed. Refer to the Proving Grounds in your June 2002 issue. In a nutshell, there are two primary scenarios; forced bottoms and natural bottoms. A “forced” bottom occurs when an extrinsic event forces a major sell off resulting in investor capitulation. The other type of bottom on Wall Street is the “natural” bottom. These bottoms occur when a weak economy runs its course, when stock prices get sufficiently cheap, when sentiment just can’t get any worse, or when all these things happen. In both instances volume is the key. We are not there yet, we have merely begun the bottoming process. It could take three weeks, three months or more. The point is that now is the time to start figuring out what to jump on when the time is right. Generally the sectors that have been brutalized the most during the market downturn is a good place to start. Financials and Real Estate are currently at the top of that list. Contrarian investing is tricky. To succeed you need to trust yourself and filter out the noise. It is an election year so there will be no shortage of public outcry about the state of the markets. It is going to get worse before it gets better. When it can’t get any worse, it will. When the recovery is nowhere in sight, it has probably already begun. When everyone is asking if they should sell, it is probably time to buy. Happy Birthday America! Have a safe and enjoyable holiday.
Jeffrey A. Hirsch, Editor
J. Taylor Brown, Director of Research
This article is entirely accurate but in my humble opinion about 8-12 months too early. We still have a ways to go in this bear market. The average joe is pessimistic because this is a consumer led recession. Joe knows and has known for a while that things are bad. The market is only confirming what Joe has known. To expect that the market will overcome the dual forces of inflation and consumer slowdown (aka stagflation) in the near term or mid term future is being premature. I agree that at some point this will end and some amazing buying opportunities will exist. We're just not there yet. We've had just ONE bear market rally so far. There will be atleast 3 or 4 such false rallies which will exhaust all bullish sentiment. And when everything seems darkest.... Mr. Hirsch and Mr. Brown - you do great work with your research. Your semi-monthly bulletins are eaglerly awaited. Thank you.
TWM revisited
TWM (The Ultrashort Russell) has been a strong investment since the end of May. Based on Will Rahal's blog (who originally recommended TWM at 68), I exited TWM today making a nice profit (Thanks Will!). Currently expecting a short term bounce here in the major indexes including the DOW and went long DDM (The Ultralong DOW) see chart below to take advantage of the expected bounce. If the bounce doesn't happen - then I go quickly back to TWM.
This is not a recommendation to buy or sell anything including TWM or DDM. Do your own research. This blog does not take responsibility for any losses.
ECB hikes
ECB hikes key rate to 4.25%
'No bias' on future rate moves, says ECB's Trichet
By William L. Watts, MarketWatch
Last update: 11:50 a.m. EDT July 3, 2008
LONDON (MarketWatch) -- The European Central Bank returned to a wait-and-see mode on monetary policy Thursday, but only after making good on a threat to hike rates for the first time in 13 months in an effort to wrestle down surging inflation pressures.
"Starting from here, I have no bias" on interest rates, ECB President Jean-Claude Trichet told reporters at his monthly news conference following the central bank's widely-anticipated decision to hike its key lending rate by 25 basis points, or a quarter of a percentage point, to 4.25%.
'Starting from here, I have no bias.'
— Jean-Claude Trichet, ECB
Financial markets had previously factored in expectations that Thursday's move would be the first in a series of hikes. But economists said Trichet's remarks indicated that the ECB is content to see how inflationary pressures develop as it wrestles with surging prices and signs that growth across the 15-nation euro zone is headed for a significant slowdown.
Trichet, who issued a clear warning in June about the possibility of a July rate hike, used none of the phrases employed in the past to signal another move was imminent.
Key phrases
Asked about the lack of language highlighting either "heightened alertness" or "strong vigilance" on inflation pressures, Trichet would say only that the ECB's message was clear and that the governing council would strive to communicate with the markets in "a clear fashion that will allow us to be as predictable in the future as we have been in the past."
The lack of such phrases - used in the past to flag rate hikes - indicates "no further interest rate hikes are currently planned in the near term at the very least," said Howard Archer, chief U.K. and European economist at Global Insight.
Instead, the language signals that the "the ECB is back in a neutral position for now and will take into account all new information regarding the outlook for inflation and economic growth," said Juergen Michels, an economist with Citigroup, in a research note.
"We continue to expect that deteriorating economic confidence and financial market data will offset more negative inflation news in coming news months, and thus expect rates to be unchanged. However, a further rate hike in coming months is not ruled out," Michels said.
Indeed, Trichet did warn that the ECB remains worried about the potential for surging food and fuel costs to feed through to other prices, particularly through wage- and price-setting.
The ECB governing council "is monitoring price-setting behavior and wage negotiations in the euro area with particular attention," he said.
Thursday's rate hike came after Trichet repeatedly expressed fears that commodity-led inflation pressures could feed into a wage-price spiral. After June's policy meeting, Trichet said the governing council was in a state of "heightened alertness," and that a small July rate rise was possible.
Euro retreats
The euro fell sharply in the wake of Thursday's remarks after pushing above the $1.59 level against the dollar ahead of the rate move. Traders had said it would have taken a decidedly hawkish tone by Trichet to allow the euro to test its all-time high above $1.60.
The euro is 1.2% lower on the day at $1.5705. See full story.
European Central Bank President Jean-Claude Trichet answers questions by WSJ reporter Joellen Perry on current monetary policies. (July 3)European government bonds rallied as markets scaled back expectations for further rate hikes, sending down yields, particularly at the two-year area, which is more sensitive to official rate expectations. The 10-year German government bund yield was down around eight basis points to 4.56%, while the two-year was off around 17 basis points to 4.47%.
The news also helped lift European stocks, with the pan-European Dow Jones Stoxx 600 index (ST:SXXP: news, chart, profile) erasing earlier losses to finish 0.9% higher. See full story.
The rate hike comes as the ECB and other central banks grapple with the monetary-policy dilemma posed by surging inflation pressures and a slowing economy.
In a separate move earlier Thursday, Sweden's Riksbank hiked its repo rate by a quarter point to 4.5% and indicated two more hikes are likely before the end of the year in an effort to push inflation back toward its target range.
Trichet never softened his hawkish tone ahead of Thursday's meeting despite growing evidence that the 15-nation euro-zone economy was showing signs of a potentially significant slowdown, particularly across Spain, Italy and the southern euro zone, as well as Ireland.
Earlier Thursday, the June purchasing managers index for the euro-zone service sector pointed to a contraction. The headline index fell to 49.1 from 50.6 in May, slipping from a preliminary reading of 49.5 and from April's 50.6.
The move below 50 signals that purchasing managers believe the sector, which makes up around three quarter of the euro-zone economy, saw a contraction in activity. A reading of more than 50 indicates growth.
The breakdown of data by country underscored divergence across the euro zone, with readings from Germany and France remaining above the 50 level, while Italy, Spain and Ireland remained mired below the key dividing line.
The data, along with falling manufacturing sector PMIs, declining measures of business and consumer sentiment, and other data, underline expectations the euro zone's solid first-quarter performance will slow significantly into the second half of the year.
Trichet acknowledged a weakening growth outlook for the euro area, but said the region's fundamentals remain sound.
Meanwhile, the ECB's sole mandate is to ensure price stability. And economists said a surge in annual consumer inflation to 4% in June - more than double the ECB's target rate of just below 2% -- sealed the case for Thursday's rate hike.
William L. Watts is a reporter for MarketWatch in London.
ECB signaled today that the Eurozone will be slowing soon. Trichet is expecting slowing economy to cool inflation. That has been predicted by several pundits including Nouriel Roubini who I respect greatly. I am still convinced that as long as a weak dollar policy remains in place or the Bretton II agreement is re-worked worldwide stagflation has a stronger chance than slowing inflation and growth.
'No bias' on future rate moves, says ECB's Trichet
By William L. Watts, MarketWatch
Last update: 11:50 a.m. EDT July 3, 2008
LONDON (MarketWatch) -- The European Central Bank returned to a wait-and-see mode on monetary policy Thursday, but only after making good on a threat to hike rates for the first time in 13 months in an effort to wrestle down surging inflation pressures.
"Starting from here, I have no bias" on interest rates, ECB President Jean-Claude Trichet told reporters at his monthly news conference following the central bank's widely-anticipated decision to hike its key lending rate by 25 basis points, or a quarter of a percentage point, to 4.25%.
'Starting from here, I have no bias.'
— Jean-Claude Trichet, ECB
Financial markets had previously factored in expectations that Thursday's move would be the first in a series of hikes. But economists said Trichet's remarks indicated that the ECB is content to see how inflationary pressures develop as it wrestles with surging prices and signs that growth across the 15-nation euro zone is headed for a significant slowdown.
Trichet, who issued a clear warning in June about the possibility of a July rate hike, used none of the phrases employed in the past to signal another move was imminent.
Key phrases
Asked about the lack of language highlighting either "heightened alertness" or "strong vigilance" on inflation pressures, Trichet would say only that the ECB's message was clear and that the governing council would strive to communicate with the markets in "a clear fashion that will allow us to be as predictable in the future as we have been in the past."
The lack of such phrases - used in the past to flag rate hikes - indicates "no further interest rate hikes are currently planned in the near term at the very least," said Howard Archer, chief U.K. and European economist at Global Insight.
Instead, the language signals that the "the ECB is back in a neutral position for now and will take into account all new information regarding the outlook for inflation and economic growth," said Juergen Michels, an economist with Citigroup, in a research note.
"We continue to expect that deteriorating economic confidence and financial market data will offset more negative inflation news in coming news months, and thus expect rates to be unchanged. However, a further rate hike in coming months is not ruled out," Michels said.
Indeed, Trichet did warn that the ECB remains worried about the potential for surging food and fuel costs to feed through to other prices, particularly through wage- and price-setting.
The ECB governing council "is monitoring price-setting behavior and wage negotiations in the euro area with particular attention," he said.
Thursday's rate hike came after Trichet repeatedly expressed fears that commodity-led inflation pressures could feed into a wage-price spiral. After June's policy meeting, Trichet said the governing council was in a state of "heightened alertness," and that a small July rate rise was possible.
Euro retreats
The euro fell sharply in the wake of Thursday's remarks after pushing above the $1.59 level against the dollar ahead of the rate move. Traders had said it would have taken a decidedly hawkish tone by Trichet to allow the euro to test its all-time high above $1.60.
The euro is 1.2% lower on the day at $1.5705. See full story.
European Central Bank President Jean-Claude Trichet answers questions by WSJ reporter Joellen Perry on current monetary policies. (July 3)European government bonds rallied as markets scaled back expectations for further rate hikes, sending down yields, particularly at the two-year area, which is more sensitive to official rate expectations. The 10-year German government bund yield was down around eight basis points to 4.56%, while the two-year was off around 17 basis points to 4.47%.
The news also helped lift European stocks, with the pan-European Dow Jones Stoxx 600 index (ST:SXXP: news, chart, profile) erasing earlier losses to finish 0.9% higher. See full story.
The rate hike comes as the ECB and other central banks grapple with the monetary-policy dilemma posed by surging inflation pressures and a slowing economy.
In a separate move earlier Thursday, Sweden's Riksbank hiked its repo rate by a quarter point to 4.5% and indicated two more hikes are likely before the end of the year in an effort to push inflation back toward its target range.
Trichet never softened his hawkish tone ahead of Thursday's meeting despite growing evidence that the 15-nation euro-zone economy was showing signs of a potentially significant slowdown, particularly across Spain, Italy and the southern euro zone, as well as Ireland.
Earlier Thursday, the June purchasing managers index for the euro-zone service sector pointed to a contraction. The headline index fell to 49.1 from 50.6 in May, slipping from a preliminary reading of 49.5 and from April's 50.6.
The move below 50 signals that purchasing managers believe the sector, which makes up around three quarter of the euro-zone economy, saw a contraction in activity. A reading of more than 50 indicates growth.
The breakdown of data by country underscored divergence across the euro zone, with readings from Germany and France remaining above the 50 level, while Italy, Spain and Ireland remained mired below the key dividing line.
The data, along with falling manufacturing sector PMIs, declining measures of business and consumer sentiment, and other data, underline expectations the euro zone's solid first-quarter performance will slow significantly into the second half of the year.
Trichet acknowledged a weakening growth outlook for the euro area, but said the region's fundamentals remain sound.
Meanwhile, the ECB's sole mandate is to ensure price stability. And economists said a surge in annual consumer inflation to 4% in June - more than double the ECB's target rate of just below 2% -- sealed the case for Thursday's rate hike.
William L. Watts is a reporter for MarketWatch in London.
ECB signaled today that the Eurozone will be slowing soon. Trichet is expecting slowing economy to cool inflation. That has been predicted by several pundits including Nouriel Roubini who I respect greatly. I am still convinced that as long as a weak dollar policy remains in place or the Bretton II agreement is re-worked worldwide stagflation has a stronger chance than slowing inflation and growth.
Wednesday, July 2, 2008
Dow Enters Bear Market! Its Official
U.S. Stocks Slump as Oil Surges; Dow Average Enters Bear Market
By Michael Patterson
July 2 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average into a bear market, after oil rose to a record and steelmakers and coal producers tumbled on concern the economic slump will worsen.
The Standard & Poor's 500 Index slid to its lowest since July 2006 as crude climbed above $143 a barrel, dimming the outlook for corporate profits. General Motors Corp., the biggest U.S. automaker, plunged to a 54-year low on Merrill Lynch & Co.'s warning that ``bankruptcy is not impossible.'' Nucor Corp. led the biggest tumble in steel shares since 2002 as concern grew that the auto slump will cut demand and the government said metals orders declined. Peabody Energy Co., the biggest U.S. coal producer, tumbled as European prices fell the most since 2005.
``Investor sentiment is clearly miserable right now,'' said Wayne Wilbanks, who oversees about $1.2 billion as chief investment officer of Wilbanks Smith & Thomas Asset Management in Norfolk, Virginia. ``A lot of this misery among investors is starting to get priced into the indices.''
The Dow lost 166.75 points, or 1.5 percent, to 11,215.51. The S&P 500 plunged 23.38, or 1.8 percent, to 1,261.53, extending its 2008 loss to 14 percent. The Nasdaq Composite Index slid 53.51, or 2.3 percent, to 2,251.46. More than five stocks fell for each that rose on the New York Stock Exchange.
Technology and consumer shares also helped fuel the market's retreat after a private report showed a bigger-than-forecast drop in jobs last month. The 30-stock Dow average extended its retreat from the October record to more than the 20 percent, the first time since 2002 the gauge has closed below the threshold that signals a so-called bear market.
To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net. Last Updated: July 2, 2008 16:09 EDT
Its official. The recession is here.
By Michael Patterson
July 2 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average into a bear market, after oil rose to a record and steelmakers and coal producers tumbled on concern the economic slump will worsen.
The Standard & Poor's 500 Index slid to its lowest since July 2006 as crude climbed above $143 a barrel, dimming the outlook for corporate profits. General Motors Corp., the biggest U.S. automaker, plunged to a 54-year low on Merrill Lynch & Co.'s warning that ``bankruptcy is not impossible.'' Nucor Corp. led the biggest tumble in steel shares since 2002 as concern grew that the auto slump will cut demand and the government said metals orders declined. Peabody Energy Co., the biggest U.S. coal producer, tumbled as European prices fell the most since 2005.
``Investor sentiment is clearly miserable right now,'' said Wayne Wilbanks, who oversees about $1.2 billion as chief investment officer of Wilbanks Smith & Thomas Asset Management in Norfolk, Virginia. ``A lot of this misery among investors is starting to get priced into the indices.''
The Dow lost 166.75 points, or 1.5 percent, to 11,215.51. The S&P 500 plunged 23.38, or 1.8 percent, to 1,261.53, extending its 2008 loss to 14 percent. The Nasdaq Composite Index slid 53.51, or 2.3 percent, to 2,251.46. More than five stocks fell for each that rose on the New York Stock Exchange.
Technology and consumer shares also helped fuel the market's retreat after a private report showed a bigger-than-forecast drop in jobs last month. The 30-stock Dow average extended its retreat from the October record to more than the 20 percent, the first time since 2002 the gauge has closed below the threshold that signals a so-called bear market.
To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net. Last Updated: July 2, 2008 16:09 EDT
Its official. The recession is here.
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