The Dow Jones Industrial Average took 208 point nosedive today as investors' confidence, which already was shaken by the subprime mortgage meltdown, further eroded after Wal-Mart Stores Inc. (NYSE: WMT) Chief Executive H. Lee Scott said people will face "difficult pressure economically."
But wait, there's more.
The world's largest retailer also slashed its earnings forecast for the year. Facing panicky investors, money manager Sentinel Management Inc. asked for permission to halt withdrawals by investors. Financial stocks including Citgroup Inc. (NYSE: C), Merrill Lynch & Co. (NYSE: MER), Fortress Investment Group LLC (NYSE: FIG) and Goldman Sachs Group Inc. (NYSE: GS) took a beating.
Prices paid to producers rose 0.6% in July, higher than the 0.2% gain forecasted by analysts surveyed by Bloomberg. The trade gap narrowed 1.7% to $58.1 billion in June, according to the U.S. Commerce Department. Unlike in previous trading days, the Fed didn't pump more money into the market.
But by about 1:20 p.m. Eastern time, the Dow fell more than 125 points to 13,111.27. The NASDAQ Composite Index was at 2,521.99, down 20.9 points. The S&P 500 dropped 15.47 to 1437.45. These dire numbers make it tough to forget that the market is still up for the year -- at least that's the case for now.
"We're going to have a problem, not only with the lower- level consumer, but with the middle- and upper-level as well,'' said Oppenheimer Co. Chief Investment Strategist Michael Metz told Bloomberg News. "We're beginning to see subpar growth in this country."
Doreen Mogavero, president and CEO of Mogavero Lee, told The Wall Street Journal (subscription required) that "[T]he fact that problems continue to pop up...creates uncertainty and fear."
"The market is very, very sensitive at this point, and any news about a potential financial problems is going to affect the way that the market trades," said Scott Fullman, director of investment strategy for I.A. Englander & Co told the Associated Press.
In another AP story, Cowen & Co.'s Mike Malone added, "here is still a tremendous amount of risk out there." he said.
Indeed, one tiny sneeze in this market may cause an avalanche. The good times aren't going to be around for quite a while.
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Reader Comments (Page 1 of 1)
8-14-2007 @ 2:53PM
bob said...
Still waiting for the Dow to drop below 13,000 so I can start buying. Doesn't look like I will have to wait much longer.
8-14-2007 @ 3:59PM
ED DUMAZ said...
THE NEXT RESISTANCE POINT IS 12,950. THAT IS APX. 50% OF THE CURRENT RANGE. IF THAT DOES NOT HOLD WE COULD SEE APX. 12,100. THIS IS THE 30 YR CYCLE AND IS ON TRACT AND SCHEDULE. TIME FRAME FROM 28 TO 60 TRADING DAYS DOWN.
MOST FUTURE TRADERS USE THE PAST CYCLES/WHY NOT STOCK PEOPLE
ED
8-14-2007 @ 6:32PM
SHELDON said...
Too much focus is made on the Dow...It is 30 stocks...look at the S&P500...I do this for a living managing a very large fund...As it is, the S&P500 closed below its 200 day moving average of 1453.75 (closing at 1426.50)..Next potential support is 1409 or thereabouts...You will probably see a dead cat bounce tomorrow. Absent Federal Reserve action (i.e., emergency rate cut), you can expect the S&P500 to test the 365 day moving average of 1382 or thereabouts...Sell rallies until there is a clear and definitive break above 1500.
8-14-2007 @ 6:32PM
robert greenwood said...
This selloff in the markets is hitting everything. Closed end funds, gold stocks, retailers, you name it. The Fed has delayed much too long and apparently does not grasp the gravity of the situation we face.
8-14-2007 @ 6:05PM
robert greenwood said...
This selloff in the markets is hitting everything. Closed end funds, gold stocks, retailers, you name it. The Fed has delayed much too long and apparently does not grasp the gravity of the situation we face.
8-14-2007 @ 11:06PM
mmfowler said...
Is it global warming or is it cyclical?
8-14-2007 @ 11:10PM
dennis said...
#6-"global warming" or "cyclical"? What the hell! Are you on the wrong website- or maybe even the wrong planet-geez
8-15-2007 @ 8:23AM
Laura said...
Dow/down--------Nasdaq/down------S&P/down
Stock futures down down down.... Milk going UP, beef going UP, interest rates going UP, minimum charge card payments/ going UP........... Walmart is hurting, but everyday their lots are full..........taxes on bottled water........
I'm holding....not selling..... I work in import and can't tell you how much is coming into the USA..... if all these companies are doing so badly then why are they buying .... buying.... buying.... China, Japan, Germany, Belgium...........chairs from Italy....bearings from China..........Caterpillar parts up the yang yang...........I'm telling everyone if the economy is so bad then someone better take a real good look at what we are bringing into this country. Is it just the rich buying??????????????????