Posted on 02/27/2007 12:03:41 PM PST by cgk
Edited on 02/27/2007 3:25:19 PM PST by Admin Moderator. [history]
The Dow Jones industrial average is down more than 500 points with about an hour of trading left today. The Nasdaq Composite is off more than 100.
A 9 percent slide in Chinese stocks, which came a day after investors sent Shanghai's benchmark index to a record high close, set the tone for U.S. trading.
Investors' confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, which were raised a day earlier when former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.
"It looks more and more like the economy is a slow growth economy," said Michael Strauss, chief economist at Commonfund. "Moderate economic growth is good an abrupt stop in economic growth scares people."
The market had been expecting the government on Wednesday to revise its estimate of fourth-quarter GDP growth down to an annual rate of about 2.3 percent from an initial forecast of 3.5 percent, and grew increasingly nervous on Tuesday that the figure could come in even lower.
The housing market, which the Street had been hoping had bottomed out, also looked far from recovery after a Standard & Poor's index indicated that single-family home prices across the nation were flat in December. A later report from the National Association of Realtors said existing home sales climbed in January by the largest amount in two years, but the data didn't erase housing-related concerns, as median home prices fell for a sixth straight month.
A suicide bomber attack on the main U.S. military base in Afghanistan where Vice President Dick Cheney was visiting also rattled the market.
China's stock market plummeted Tuesday from record highs as investors took profits when concerns arose that the Chinese government may try to temper its ballooning economy by raising interest rates again or reducing more of the money available for lending.
"Corrections usually happen because of a catalyst, and this may be it," said Ed Peters, chief investment officer at PanAgora Asset Management. "The move in China was a surprise, and when a major market has a shock it ripples through the rest of the market. With all the trade that goes on with China, there tends to be a knee-jerk reaction with that kind of drop."
The Shanghai Composite Index tumbled 8.8 percent to close at 2,771.79, its biggest decline since it fell 8.9 percent on Feb. 18, 1997. Since Chinese share prices doubled last year as investors poured money into the market after the completion of shareholding reforms, trading in Shanghai has been very volatile.
Hong Kong's benchmark Hang Seng Index dropped 1.8 percent, and Malaysia's Kuala Lumpur Composite Index fell 2.8 percent. Japan's Nikkei stock average fell a more moderate 0.52 percent, but European markets were rattled Britain's FTSE 100 lost 2.31 percent, Germany's DAX index dropped 2.96 percent, and France's CAC-40 fell 3.02 percent.
Bond prices rose as investors bought into the safe-haven Treasury market, pushing the yield on the benchmark 10-year Treasury note down to 4.55 percent, its lowest level so far this year, from 4.63 percent late Monday. The bond buying was sparked primarily by the durable goods orders, which the Commerce Department said fell 7.8 percent, much more than what the market expected.
The durable goods drop raised the chance of the Federal Reserve easing interest rates later in the year a possibility that makes the bond market an attractive place to be right now.
The hope for slowing inflation could be dashed, though, if energy costs keep rising. Oil prices initially fell Tuesday on worries that Chinese demand could be dampened should its economy slow down, but later rose on escalating tensions in the Middle East. Crude rose 4 cents to $61.43 a barrel on the New York Mercantile Exchange.
The dollar slipped against other major currencies, while gold also fell.
The Dow has been climbing at a steady rate since last summer, but over the past few trading sessions, stocks have pulled back on the worry that the market is due for a correction. Many analysts have noted that the Dow hasn't seen a 2 percent decline in more than 120 sessions.
Data indicating a slower economy had recently been giving stocks a boost on the hopes that the Fed will lower interest rates, which could reinvigorate consumer spending and the struggling housing market. But the market may fall further before that happens, analysts said.
"If in a week or two, the psychology in the U.S. market turns to the realization that we're in a modest growth economy of 2 to 3 percent growth, that will help temper inflation pressures going forward. If that perception evolves, there's an increase in the likelihood that the Fed will be lowering rates rather than raising rates. Structurally, it's a development that should be good for the equity market, but it might be an event that unfolds after prices are lower," Strauss said.
Declining issues outnumbered advancers by about 7 to 1 on the New York Stock Exchange, where volume came to 1.39 billion shares.
No sector was left unscathed by Tuesday's sell-off, and all of the 30 Dow components were lower in early afternoon trading.
NYSE-listed shares of Chinese companies plunged. China Mobile Ltd. tumbled $3.39, or 6.9 percent, to $45.89. Mindray Medical International Ltd. dropped $3.69, or 12.85 percent, to $25.02. China Eastern Airlines Corp. fell $4.435, or 13.14 percent, to $29.315.
On the Nasdaq, Internet company Baidu.com Inc. fell $4.44, or 4 percent, to $107.27. Shanda Interactive Entertainment Ltd., which develops online games, fell $1.42, or 5.7 percent, to $23.50.
___
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
It's China.
LOL! You're in good company even if I do say so myself. ;)
The Chicoms have been hiding truly astounding amounts of bad loans their banks have been carrying.
Greenspan? Bernanke is the new Fed chairman, as far as I know and he's the one who mentioned a recession by late '07 or early '08.
Yes, I know it has nothing really to do with it, but that hasn't stopped the MSM from blaming all market woes on Repubs in the past.
IT'S ALL YOUR FAULT????
There is a theory on one of the liberal blogs that Cheney is overseas making preparations for an attack on Iran - could be the truth, for all I know.
Dow down 500 now
What is it that we havent heard yet causing this?
ap on Yahoo
Dow industrials plunge more than 500
http://news.yahoo.com/s/ap/20070227/ap_on_bi_st_ma_re/wall_street_91
NEW YORK - The Dow Jones industrial average is down more than 500 points with about an hour of trading left today. The Nasdaq Composite is off more than 100.
A 9 percent slide in Chinese stocks, which came a day after investors sent Shanghai's benchmark index to a record high close, set the tone for U.S. trading.
Investors' confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, which were raised a day earlier when former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.
"It looks more and more like the economy is a slow growth economy," said Michael Strauss, chief economist at Commonfund. "Moderate economic growth is good an abrupt stop in economic growth scares people."
The market had been expecting the government on Wednesday to revise its estimate of fourth-quarter GDP growth down to an annual rate of about 2.3 percent from an initial forecast of 3.5 percent, and grew increasingly nervous on Tuesday that the figure could come in even lower.
The housing market, which the Street had been hoping had bottomed out, also looked far from recovery after a Standard & Poor's index indicated that single-family home prices across the nation were flat in December. A later report from the National Association of Realtors said existing home sales climbed in January by the largest amount in two years, but the data didn't erase housing-related concerns, as median home prices fell for a sixth straight month.
A suicide bomber attack on the main U.S. military base in Afghanistan where Vice President Dick Cheney was visiting also rattled the market.
China's stock market plummeted Tuesday from record highs as investors took profits when concerns arose that the Chinese government may try to temper its ballooning economy by raising interest rates again or reducing more of the money available for lending.
"Corrections usually happen because of a catalyst, and this may be it," said Ed Peters, chief investment officer at PanAgora Asset Management. "The move in China was a surprise, and when a major market has a shock it ripples through the rest of the market. With all the trade that goes on with China, there tends to be a knee-jerk reaction with that kind of drop."
The Shanghai Composite Index tumbled 8.8 percent to close at 2,771.79, its biggest decline since it fell 8.9 percent on Feb. 18, 1997. Since Chinese share prices doubled last year as investors poured money into the market after the completion of shareholding reforms, trading in Shanghai has been very volatile.
Hong Kong's benchmark Hang Seng Index dropped 1.8 percent, and Malaysia's Kuala Lumpur Composite Index fell 2.8 percent. Japan's Nikkei stock average fell a more moderate 0.52 percent, but European markets were rattled Britain's FTSE 100 lost 2.31 percent, Germany's DAX index dropped 2.96 percent, and France's CAC-40 fell 3.02 percent.
Bond prices rose as investors bought into the safe-haven Treasury market, pushing the yield on the benchmark 10-year Treasury note down to 4.55 percent, its lowest level so far this year, from 4.63 percent late Monday. The bond buying was sparked primarily by the durable goods orders, which the Commerce Department said fell 7.8 percent, much more than what the market expected.
The durable goods drop raised the chance of the Federal Reserve easing interest rates later in the year a possibility that makes the bond market an attractive place to be right now.
The hope for slowing inflation could be dashed, though, if energy costs keep rising. Oil prices initially fell Tuesday on worries that Chinese demand could be dampened should its economy slow down, but later rose on escalating tensions in the Middle East. Crude rose 4 cents to $61.43 a barrel on the New York Mercantile Exchange.
The dollar slipped against other major currencies, while gold also fell.
The Dow has been climbing at a steady rate since last summer, but over the past few trading sessions, stocks have pulled back on the worry that the market is due for a correction. Many analysts have noted that the Dow hasn't seen a 2 percent decline in more than 120 sessions.
Data indicating a slower economy had recently been giving stocks a boost on the hopes that the Fed will lower interest rates, which could reinvigorate consumer spending and the struggling housing market. But the market may fall further before that happens, analysts said.
"If in a week or two, the psychology in the U.S. market turns to the realization that we're in a modest growth economy of 2 to 3 percent growth, that will help temper inflation pressures going forward. If that perception evolves, there's an increase in the likelihood that the Fed will be lowering rates rather than raising rates. Structurally, it's a development that should be good for the equity market, but it might be an event that unfolds after prices are lower," Strauss said.
Declining issues outnumbered advancers by about 7 to 1 on the New York Stock Exchange, where volume came to 1.39 billion shares.
No sector was left unscathed by Tuesday's sell-off, and all of the 30 Dow components were lower in early afternoon trading.
NYSE-listed shares of Chinese companies plunged. China Mobile Ltd. tumbled $3.39, or 6.9 percent, to $45.89. Mindray Medical International Ltd. dropped $3.69, or 12.85 percent, to $25.02. China Eastern Airlines Corp. fell $4.435, or 13.14 percent, to $29.315.
On the Nasdaq, Internet company Baidu.com Inc. fell $4.44, or 4 percent, to $107.27. Shanda Interactive Entertainment Ltd., which develops online games, fell $1.42, or 5.7 percent, to $23.50.
___
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
Oh good, I don't feel like such a dunce...
MAKE YOUR TIME - YOU ARE GOING DOWN TO DESTRUCTION - ALL YOUR STOCK ARE BELONG TO US...
And the Dow is still well over 12,000. ...far now.
I think program trading is supposed to be halted at.. a 5% drop?
Are you sure you know what you're asking for? You will get thousands of replies, half will says it's good news and the other half will say it's bad news.
Carolyn
China burped... probably Global Warming.
THE PELOSI SELLOFF
Democrats causing Markets, Investments to CRASH!!
Remember all the "BLAME BUSH" articles whenever the markets would tick down .000001%?
Time for a little payback?
As long as it stops falling before it loses 1,000 point this week, it will be a good thing. It will offer an opportunity to jump back into the market. It will yo-yo for a bit and all will be right with the world in a couple of weeks.
Disclaimer: Ignore any advice I may have on the stock market as apparently some FReepers have lost all their wealth based on my market predictions. :o)
Nope. The oil & gas sector is down today also 4.10% as of 3:13 pm est.
China suffered a setback earlier today.
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