Posted on 10/19/2007 2:36:36 PM PDT by Alter Kaker
NEW YORK (AP) — The Dow Jones industrial average dropped more than 360 points Friday — the anniversary of the Black Monday crash 20 year ago — as renewed credit concerns, lackluster corporate earnings, and rising oil prices spooked investors.
The market turned sharply lower in late afternoon when Standard & Poor's again reduced its ratings on residential mortgage-backed securities. The latest reduction, on more than 1,400 types of securities, added to investors unease about credit quality.
In addition, mixed results from Dow components Caterpillar Inc., Honeywell Inc., and 3M Co. gave investors little incentive to take chances on the market. And oil prices added to investors' list of concerns after briefly moving above the psychological barrier of $90 per barrel for the first time.
In one bright spot, Google Inc. reported stronger-than-expected profits, drawing a number of analyst upgrades.
"I was not surprised there was some correction, given our expectation that earnings growth was going to fall short of expectations," said Alan Gayle, senior investment strategist, director of asset allocation for Trusco Capital Management.
"I think stock analysts were slow to incorporate the impact of the subprime crisis on third-quarter earnings," he added.
According to preliminary calculations, the Dow fell 366.94, or 2.64 percent, to 13,522.02. The Dow was down for the fifth straight session.
Broader stock indicators also fell. The Standard & Poor's 500 index fell 39.45, or 2.56 percent, to 1,500.63, and the Nasdaq composite index dropped 74.15, or 2.65 percent, to 2,725.16. The Nasdaq fell below the noteworthy technical level of 2,750, adding to selling pressure.
Friday's pullback pales in comparison to what traders on the floor of the New York Stock Exchange had to contend with 20 years ago. On Oct. 19, 1987 — Black Monday — the Dow plunged 23 percent amid concerns about interest rates and slowing economic growth. A decline of similar proportion given the market's current levels would mean a drop of some 3,000 points.
Yet, next week or the week after when the DOW has reached other all time high....it will barely be noted on any of these networks....
I've already seen today over 4 "news" stories moaning the plights of "middle class" American's living paycheck to paycheck in this terrible economy....(such BS!, constant BS! - When will the WH and RNC put out a systematic PR campaign to tout our economy successes over the past 5 years??).
No, not yet. It has more to go.
Google at this level will be a historical metaphor for the definitive overvalued security.
Bookmark it Dan-o
Here comes more interest rate drops...
Puh-leeze.
Yes, oil is up to $90.07 a barrel. I think it’s a damn shame that is the price we are buying it for, not selling it at.
Did you notice that the Dollar, our dollar dropped another cent today to $.735? On August 17th it was at $.820
Keep talking about how good this economy is.
Yes, Google stayed in the green today, one of the few. I think the market was 15 to 1 selling during the last hour. Great day!
Oil is up and the dollar is down, but so far, what has the impact really been?
Yep! record low unemployment! Trade deficit shrinking! Tax coffers at a all time high! Stock Market at record high! Yep, time to jump off a ledge!
When the market hits new highs the media says it’s good for Wall Street but Main Street is not benefiting...so when the market falls it shouldn’t have any impact on Main Street...no?
Call your city treasurer and ask him/her how your city is doing. Ask if a tax increase in coming before the new year. My city council isn’t looking forward to the upcoming public meetings because they know they are going to get ripped.
Then put all of your money in the mattress and repeat after me: WE’RE DOOMED I TELL YA!!
Tax receipts are down but not to the panic point like in ‘02. Our utility is having more problems because they raised rates a lot the past few years and told people to conserve. Now they are and they are not selling enough...screw ‘em.
If cities concentrated on attracting more industry and less on pimping for tourism businesses, they would be better off.
I’ll worry more when city gov and utilities quit paying outlandish bonuses and 6-7 figure severance packages.
Booooya
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