Posted on 01/08/2008 2:52:49 PM PST by shrinkermd
The stock market suffered a big hit from an old two-headed monster.
Worries about bad mortgage bets and weak consumer spending -- the same problems that plagued the market throughout late 2007 -- intensified Tuesday and sent major indexes sharply lower. The Dow Jones Industrial Average plummeted 238.42 points, or 1.9%, to 12589.07, its lowest point in nearly nine months.
The Dow is down 5.1% in 2008's first five trading days -- a key period often considered an important harbinger for the market's fate the rest of the year. The blue-chip average has also fallen 11% from its early-October record, a decline that fits the traditional definition of a correction that removes speculative excess from a market.
One of the Dow's weakest components was AT&T, which slid 4.8% after its CEO said at a conference that the telecommunications giant is experiencing a slowdown in its consumer segment, including an increase in disconnections due to unpaid bills. The news came late in the day, adding downward momentum to a market already beset by fresh concerns about fallout from the credit crisis.
"Everything we've seen today just reinforces the fears people had," of a spillover effect from Wall Street's soured credit bets on the broader economy, said floor trader Ted Weisberg, of Seaport Securities, a New York stock brokerage. "We rolled over the calendar, but our problems came with us."
The S&P 500 fell 1.8%, or 25.99 points, to end at 1390.19. Both its consumer-related sectors veered from positive territory into the red following AT&T's comments. The technology-focused Nasdaq Composite Index was down 2.4%, or 58.95 points, at 2440.51 at the close.
(Excerpt) Read more at online.wsj.com ...
I like how people use the volatility of the stock market as an infallible economic indication. *sighs*
The gas man filled our LP tank today. He put in 225 gallons of LP at the bargain price of $2.07 per gallon. The total bill was $465.75 for ONE MONTH of heating the house. (Last month it was $2 even per gallon, so it’s up 3.5% in one month.)
Last year at this time the same amount of LP would have cost $326.25 ($1.45/gal). Two years ago, the same amount would have cost 303.75 ($1.35/gal).
That’s a 42.7% increase over last year. There is no way anyone, no matter how much they hem, haw, lie and cajole, can justify that kind of price increase for a vital product like home heating fuel.
Something has got to give, because this simply cannot continue. We’ll be moving to Phoenix or Miami if it does!
Using 33 years as a registered representative, registered principle and NYSE registered supervisor as my credentials, I say the prices of stocks are always 100% about perception.
You’re lying! There is no inflation in the economy!
An old Wall Street axiom; "Never try to catch a falling knife."
Your ‘Fleece Trade’ agreements at work. Investors rely on interest rate reductions to generate prosperity.
I don't think China and India will consent to remain poor so as not to compete with you for oil.
Your lucky. My propane gas was 2.51 and went to pay the bill last week and was told the new price is 2.93 per gallon. Glad I filled it up when I did.
We are going to keep the thermostat down to try to get us through the winter.
NorthWoody: “That’s a 42.7% increase over last year. There is no way anyone, no matter how much they hem, haw, lie and cajole, can justify that kind of price increase for a vital product like home heating fuel.”
With oil around $100 a barrel, what do you expect the heating oil companies to do? They have to bid in the same oil markets as everyone else. Would you have government subsidize or try to restrict prices? That’s not the answer.
Please don’t think I’m not sympathetic, but the free market ultimately provides the best product at the lowest possible price. At $465.75 per month, home improvements are relatively more economical. Simple things like turning down the thermostat or inexpensive improvements like caulking or weatherstripping can save you a lot of money.
I’m certainly not rejoicing over higher prices, but they are an incentive for people to improvise. When oil was $25 a barrel and gas a $1 a gallon, people didn’t have any incentive to improve technology or reduce inefficiencies. If oil continues to rise, people adapt and get better, just like we always have. Government is about the only thing that could make this difficult situation much, much worse.
Positive: “An old Wall Street axiom; “Never try to catch a falling knife.””
Believe me, I’ve suffered some wicked cuts of late, but they haven’t hit an artery. Since I’m an investor, not a day or swing trader, I hope to ride this out while continuing to increase my number of shares. Unless this is the end of the world, what went down will eventually come back up. After all, where else can people go? Real estate? Silver and gold? Stuffing mattresses?
>>>What changed today except perception<<<<
Maybe the markets are worried about another Jimmy Carter being elected president. The Big boys want to take their profits while the capital gains tax is still low...
Perhaps you should change to natural gas. We have 3500 sq ft house and we pay about $319 a month for all utilities. I should add that the house is mostly glass and we live in the Northeast. The house was built in 1963 and has almost no insulation. It cost us less to run this house than it did to run our first house which was 1905 four square at 1800 sq ft. Natural gas is the way to go.
I am at a loss for reason and logic! 8 consecutive days the Nasdaq has lost! The hemorrhage must stop! Mutual funds are getting hit hard!! I ask myself, who is doing the selling, what foreign country is selling, today at 3:00 P.M. exactly, the Dow, Nasdaq & the S&P went straight down. You can look at the chart and see all three went down in precisely the same pattern.
CFC or Countrywide opended @ $7.80 and about 3:00 on Marketwatch the rumor got started that CFC would file bankruptcy, about 4:00 P.M. CFC was selling at around $5.40 a share, lost about 31 percent and the trend line looked Bad. I am praying I hold out!!
At times like this I like to listen to Larry Kudlow. His show has a calming effect on me on days like this. He said there is a lot of trepidation about the upcoming earnings reports for the financials which make about 1/3 of the S&P. Plus an analyst just downgraded Intel which hurt high tec and of course there is still the housing fallout. Overall Larry Kudlow is still optimistic..
I think the market is over sold. A stock broker friend told me along time ago “the market is a madman”. Invest for the long run.
Good luck in ‘08
One more nail in Countrywide's coffin. More debt isn't the solution to too much debt.
It's a good thing energy isn't included in the core inflation number, otherwise people might think prices are going up.
/ bitter sarcasm
This was not an atypical pattern today, it will often quickly change directions at certain time intervals, like 12 and 2:00. I would guess program trading is the likely culprit. If I were a foriegn investor, I'd be loading up, because with the currency devalued, they get a 30% discount already.
If you don't have to sell, don't. Just pick some stocks that you would like to buy, and watch them carefully. At some time this year, they may be cheap enough for you to buy. Otherwise, just be patient.
Get a wood stove or wood furnace and cut them out. Guaranteed you will pay for a good wood stove in 1 winter. Especially if the price goes up 50% every year.
I am so glad I bought a different house that didn’t use propane. My wood furnace saves me at least $150.00 a month.I have electric heat. Figuring a normal electric bill runs $120.00, it could potentially cost me $300 a month. But our electric rates only went up 17%. Propane........I have always felt it was a rip off.
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