Stocks Tumble Toward Bear Market On Rising Economic Concerns
TOOLBOX   Resize
 Save/Share +
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
|
U.S. stocks slumped last week, pushing the Dow Jones industrial average to the brink of a bear market on mounting concern that write-downs and record oil prices will keep eroding profit and economic growth.
The Dow retreated 4.2 percent, to 11,346.51, and needs to fall another 0.1 percent to complete a bear-market decline of 20 percent from its October record. The Standard & Poor's 500-stock index dropped 3 percent, to 1278.38, a three-month low. The Nasdaq composite index lost 3.8 percent, to 2315.63.
"The market is dealing with anxiety about further losses and also coming to grips that we're in a significantly slower period of economic growth," said Kevin Cronin, head of investments at Putnam Investments. "People thought the worst was behind us."
J.P. Morgan Chase, Citigroup and Bank of America led financial stocks in the S&P 500 to the fourth week of declines, the longest streak since 2005. Goldman Sachs recommended selling bank shares, predicting credit losses will linger into 2009. UPS fell the most since July 2006 after saying profit will miss its forecast because fuel costs and an "anemic" economy reduced demand for air shipments.
Nine out of 10 S&P 500 industries fell last week, giving the index an 8.7 percent plunge in June. That's the steepest monthly slide since September 2002.
Goldman Sachs strategist David Kostin said expectations for 2008 and 2009 profits are "too optimistic." Credit deterioration won't peak until next year and raising capital has become more difficult for banks and brokerages because deals have performed poorly, he wrote in a report this week.
Energy stocks in the S&P 500 rose 1.4 percent after crude oil increased to a record $142.99 a barrel in New York.
Yields on Treasury securities fell as traders pared bets the Fed will raise rates. The benchmark 10-year note's yield fell to 3.97 percent, the lowest in three weeks, from 4.17 percent.
The Treasury will auction $23 billion of three-month bills and $22 billion of six-month bills on Monday. They yielded 1.81 percent and 2.10 percent, respectively, in when-issued trading. The Treasury will sell $17 billion of one-year bills, yielding 2.36 percent in when-issued trading, and one-month bills Tuesday.
-- Bloomberg News
