Skip to comments.Stocks skid on worries about economy
Posted on 06/01/2011 8:58:07 AM PDT by Signalman
NEW YORK (CNNMoney) -- A stock sell-off gained momentum Wednesday after a report showed a sharp drop in U.S. manufacturing activity and exacerbated growing fears of a slowing economic recovery.
The Dow Jones industrial average (INDU) fell 136 points, or 1.1%, with all but one of the blue chip index's 30 components lagging. Bank of America (BAC, Fortune 500), Caterpillar (CAT, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) were the worst performing stocks on the blue-chip index.
The S&P 500 (SPX) shed 14 points, or 1%, and the Nasdaq Composite (COMP) slid 23 points, or 0.8%.
Stocks were under pressure right at the open following a dismal report on private sector employment, but the selling gained momentum after the U.S. manufacturing report was released.
The Institute for Supply Management's manufacturing index for May fell to 53.5, falling short of economists forecast for a 57 reading.
"Stocks had been rising based on strong corporate earnings," said Tyler Vernon, chief investment officer at Biltmore Capital. "But the economy isn't as robust as we thought, and that's forcing investors to question whether companies will be able to maintain record high profit margins against the backdrop of a sick economy."
(Excerpt) Read more at money.cnn.com ...
How can investors worry about our economy as we enter our third consecutive summer of recovery, with the "smartest man ever" leading the free world, and with the cumulative effects of Stimulus, TARP, Bailout, Cash-for-Clunkers, QE and QE2, and ObamaCare defining our economic future? This slump is . . . dare I say it . . . unexpected.
“”But the economy isn’t as robust as we thought, and that’s forcing investors to question whether companies will be able to maintain record high profit margins against the backdrop of a sick economy.””
May be some truth to this if companies are running out of places to outsource to as well as workers to lay off. You can only work on the expense cutting for so long, eventually ya have to sell something.
Why? Don’t people in the market know that Obama is in charge? Peace be still! He can play golf with no worries and rule the free world! Have faith in the hope and change!
Communists are never good for any economy.
but GOLD is up nicely!
WHAAAA??? I woke up to some news guy on the radio saying the market futures were WAY up this morning......what happened? Oh, maybe reality hit somewhere?
Darn! I was going to post a new phrase, "IBTU"! I think we should declare that "In before the 'unexpected' adjective" LOL!
When reality hits, that 1000 point drop in two minutes will be about right.....
Didn't this guy win American Idol?
Investors sold, because the House rejected a bill to raise the debt ceiling. They’re looking for the next QE for their debt economy.