3905 Dead
2008-01-05 07:52:45 UTC
http://www.nytimes.com/2008/01/05/business/05markets.html?_r=1&oref=slogin
Stocks & Bonds
Fears on Inflation and Jobs Give 2008 a Stumbling Start
By MICHAEL M. GRYNBAUM
Published: January 5, 2008
Fears that a recession is imminent or perhaps has already begun
rocked the major stock markets this week as anxiety-addled investors
staggered through the first days of 2008.
Skip to next paragraph
Daniel Barry/Bloomberg News
The floor of the New York Stock Exchange Friday. The Dow fell over 200
points.
Multimedia
Down Days, Down Year?Graphic
Down Days, Down Year?
The blows came from several directions. On Friday, the government
reported that employers added fewer jobs in December than in any month
since August 2003, weakening one of the last pillars propping up the
ailing economy.
The cracks in the job market came on the back of $100 oil and a weak
report on manufacturing. Investors now see a significant slowdown
ahead. If jobs go away, weve got a recession, said James W.
Paulsen, chief investment officer at Wells Capital Management. Today
really ratcheted up fears.
When the closing bell rang on Friday, the Dow Jones industrials had
fallen 256.54 points, nearly 2 percent, to 12,800.18. Just three days
into 2008, the Dow has already given up half of its gains from last
year.
The Standard & Poors 500-stock index, a broader measure of the
market, is off 3.9 percent since Wednesday, its third-worst start to a
year since the index began, though pale in comparison to a 7 percent
drop in the first three trading days of 1932.
The S. & P. lost 2.5 percent on Friday to close at 1,411.63, a
35.53-point loss. The technology-heavy Nasdaq composite index
plummeted 3.8 percent, or 98.03 points, to finish at 2,504.65. The
Nasdaq is down 5.5 percent since Wednesday.
Technology companies bore the brunt of the days pain, led by an 8.1
percent fall in shares of Intel, the chip maker, after an analyst
downgraded the company citing an expected slowdown in orders. Apple
shares fell 7.63 percent, and Microsoft, Hewlett-Packard and I.B.M.
also recorded big declines.
Retail companies and other consumer-dependent sectors fell as well.
Analysts said the weak employment numbers spurred fears that consumers
would be less eager to spend if their jobs were endangered. The
resiliency of the consumer was called into question, said Sam
Stovall, chief investment strategist at Standard & Poors.
Investors ran for cover, moving into havens like gold and Treasury
bonds. The benchmark 10-year Treasury note rose for the sixth straight
day, climbing 5/32, to 103 2/32, and the yield, which moves in the
opposite direction from the price, fell to 3.87 percent from 3.89
percent late Thursday. The dollar rose slightly against the euro, and
crude oil futures fell $1.27, to $97.91 a barrel.
Market watchers may also have been unnerved by comments from President
Bush, who said on Friday that the nation cant take economic growth
for granted.
Mr. Stovall said, If the head cheerleader admits the economy is
faltering, thats not good.
Still, it was the jobs report, possibly the most influential monthly
indicator about the economy, that clinched a painful finish to a
painful week. Wall Street had been on edge since Wednesday, when a
manufacturing report that is considered a bellwether for business
activity came in weaker than expected and crude oil futures leaped to
a record nominal high.
Still haunted by fallout from the subprime mortgage crisis, investors
were looking to Fridays employment figures for a clearer picture of
the economys growth prospects in 2008.
They did not like what they saw. The economy added just 18,000 jobs in
December, far below analysts estimates of 60,000 additional jobs.
Annual job growth has fallen to its lowest level since 2004, and the
unemployment rate ticked up to 5 percent.
The weak report bolstered expectations that the Federal Reserve will
cut its benchmark interest rate when policy makers meet this month.
Futures markets now predict a half-point cut in the overnight lending
rate; on Thursday, investors betting on the Feds actions expected a
quarter-point cut.
Investors often react favorably when a rate cut appears more likely,
but on Friday they focused on the poor outlook for the economy. What
theyre worried about is not whether or not the Fed is cutting rates,
said William E. Rhodes, chief investment strategist at Rhodes
Analytics, a financial research firm. What theyre concerned about is
growth.
It was a marked change from previous months, when stock markets have
sometimes soared on poor economic data as investors hope central
bankers will lower rates, making it easier for banks to lend to
businesses, consumers, and each other.
But this weeks economic clouds had no silver lining. With oil
touching $100 a barrel on Wednesday and consumer prices on the rise,
inflation warnings are now commonplace. Creeping inflation could
constrain the Fed from cutting rates, though bankers have hinted that
they are more focused on downside risks to growth.
If inflation rises, the economy loses one of its defense mechanisms
to prevent a recession, said Russ Koesterich, head of investment
strategy at Barclays Global Investors.
Some analysts on Friday sounded grateful to be heading out for the
weekend after a raucous New Years week. Three days? Mr. Paulsen
asked, his voice grim. Seems like its been 10 months.
--
"Now, by the way, any time you hear the United States government
talking
about wiretap, it requires -- a wiretap requires a court order.
Nothing has
changed, by the way. When we're talking about chasing down terrorists,
we're
talking about getting a court order before we do so"
-George W. Bush, April 20, 2004
Not dead, in jail, or a slave? Thank a liberal!
Pay your taxes so the rich don't have to.
http://www.zeppscommentaries.com
For news feed, http://yahoogroups/subscribe/zepps_news
For essays (please contribute!)
http:yahoogroups/subscribe/zepps_essays
--
What do you call a Republican with a conscience?
An ex-Republican.
http://www.balloon-juice.com/?p=8827 (From Yang, AthD (h.c)
"I simply can not believe this is what the Republican party has
become. I just cant. It just makes me sick to think all those years
of supporting this party, and this is what it has become. Even if you
dont like the S-Chip expansion, it is hard to deny what Republicans
are- a bunch of bitter, nasty, petty, snarling, sneering, vicious
thugs, peering through peoples windows so they can make fun of their
misfortune.
Im registering Independent tomorrow."
Putsch: leading America to asymetric warfare since 2001
Not dead, in jail, or a slave? Thank a liberal!
Pay your taxes so the rich don't have to.
For the finest in liberal/leftist commentary,
http://www.zeppscommentaries.com
For news feed (free, 10-20 articles a day)
Zepps_News-***@yahoogroups.com
For essays (donations accepted, 2 articles/week)
Zepps_essays-***@yahoogroups.com
a.a. #2211 -- Bryan Zepp Jamieson
Stocks & Bonds
Fears on Inflation and Jobs Give 2008 a Stumbling Start
By MICHAEL M. GRYNBAUM
Published: January 5, 2008
Fears that a recession is imminent or perhaps has already begun
rocked the major stock markets this week as anxiety-addled investors
staggered through the first days of 2008.
Skip to next paragraph
Daniel Barry/Bloomberg News
The floor of the New York Stock Exchange Friday. The Dow fell over 200
points.
Multimedia
Down Days, Down Year?Graphic
Down Days, Down Year?
The blows came from several directions. On Friday, the government
reported that employers added fewer jobs in December than in any month
since August 2003, weakening one of the last pillars propping up the
ailing economy.
The cracks in the job market came on the back of $100 oil and a weak
report on manufacturing. Investors now see a significant slowdown
ahead. If jobs go away, weve got a recession, said James W.
Paulsen, chief investment officer at Wells Capital Management. Today
really ratcheted up fears.
When the closing bell rang on Friday, the Dow Jones industrials had
fallen 256.54 points, nearly 2 percent, to 12,800.18. Just three days
into 2008, the Dow has already given up half of its gains from last
year.
The Standard & Poors 500-stock index, a broader measure of the
market, is off 3.9 percent since Wednesday, its third-worst start to a
year since the index began, though pale in comparison to a 7 percent
drop in the first three trading days of 1932.
The S. & P. lost 2.5 percent on Friday to close at 1,411.63, a
35.53-point loss. The technology-heavy Nasdaq composite index
plummeted 3.8 percent, or 98.03 points, to finish at 2,504.65. The
Nasdaq is down 5.5 percent since Wednesday.
Technology companies bore the brunt of the days pain, led by an 8.1
percent fall in shares of Intel, the chip maker, after an analyst
downgraded the company citing an expected slowdown in orders. Apple
shares fell 7.63 percent, and Microsoft, Hewlett-Packard and I.B.M.
also recorded big declines.
Retail companies and other consumer-dependent sectors fell as well.
Analysts said the weak employment numbers spurred fears that consumers
would be less eager to spend if their jobs were endangered. The
resiliency of the consumer was called into question, said Sam
Stovall, chief investment strategist at Standard & Poors.
Investors ran for cover, moving into havens like gold and Treasury
bonds. The benchmark 10-year Treasury note rose for the sixth straight
day, climbing 5/32, to 103 2/32, and the yield, which moves in the
opposite direction from the price, fell to 3.87 percent from 3.89
percent late Thursday. The dollar rose slightly against the euro, and
crude oil futures fell $1.27, to $97.91 a barrel.
Market watchers may also have been unnerved by comments from President
Bush, who said on Friday that the nation cant take economic growth
for granted.
Mr. Stovall said, If the head cheerleader admits the economy is
faltering, thats not good.
Still, it was the jobs report, possibly the most influential monthly
indicator about the economy, that clinched a painful finish to a
painful week. Wall Street had been on edge since Wednesday, when a
manufacturing report that is considered a bellwether for business
activity came in weaker than expected and crude oil futures leaped to
a record nominal high.
Still haunted by fallout from the subprime mortgage crisis, investors
were looking to Fridays employment figures for a clearer picture of
the economys growth prospects in 2008.
They did not like what they saw. The economy added just 18,000 jobs in
December, far below analysts estimates of 60,000 additional jobs.
Annual job growth has fallen to its lowest level since 2004, and the
unemployment rate ticked up to 5 percent.
The weak report bolstered expectations that the Federal Reserve will
cut its benchmark interest rate when policy makers meet this month.
Futures markets now predict a half-point cut in the overnight lending
rate; on Thursday, investors betting on the Feds actions expected a
quarter-point cut.
Investors often react favorably when a rate cut appears more likely,
but on Friday they focused on the poor outlook for the economy. What
theyre worried about is not whether or not the Fed is cutting rates,
said William E. Rhodes, chief investment strategist at Rhodes
Analytics, a financial research firm. What theyre concerned about is
growth.
It was a marked change from previous months, when stock markets have
sometimes soared on poor economic data as investors hope central
bankers will lower rates, making it easier for banks to lend to
businesses, consumers, and each other.
But this weeks economic clouds had no silver lining. With oil
touching $100 a barrel on Wednesday and consumer prices on the rise,
inflation warnings are now commonplace. Creeping inflation could
constrain the Fed from cutting rates, though bankers have hinted that
they are more focused on downside risks to growth.
If inflation rises, the economy loses one of its defense mechanisms
to prevent a recession, said Russ Koesterich, head of investment
strategy at Barclays Global Investors.
Some analysts on Friday sounded grateful to be heading out for the
weekend after a raucous New Years week. Three days? Mr. Paulsen
asked, his voice grim. Seems like its been 10 months.
--
"Now, by the way, any time you hear the United States government
talking
about wiretap, it requires -- a wiretap requires a court order.
Nothing has
changed, by the way. When we're talking about chasing down terrorists,
we're
talking about getting a court order before we do so"
-George W. Bush, April 20, 2004
Not dead, in jail, or a slave? Thank a liberal!
Pay your taxes so the rich don't have to.
http://www.zeppscommentaries.com
For news feed, http://yahoogroups/subscribe/zepps_news
For essays (please contribute!)
http:yahoogroups/subscribe/zepps_essays
--
What do you call a Republican with a conscience?
An ex-Republican.
http://www.balloon-juice.com/?p=8827 (From Yang, AthD (h.c)
"I simply can not believe this is what the Republican party has
become. I just cant. It just makes me sick to think all those years
of supporting this party, and this is what it has become. Even if you
dont like the S-Chip expansion, it is hard to deny what Republicans
are- a bunch of bitter, nasty, petty, snarling, sneering, vicious
thugs, peering through peoples windows so they can make fun of their
misfortune.
Im registering Independent tomorrow."
Putsch: leading America to asymetric warfare since 2001
Not dead, in jail, or a slave? Thank a liberal!
Pay your taxes so the rich don't have to.
For the finest in liberal/leftist commentary,
http://www.zeppscommentaries.com
For news feed (free, 10-20 articles a day)
Zepps_News-***@yahoogroups.com
For essays (donations accepted, 2 articles/week)
Zepps_essays-***@yahoogroups.com
a.a. #2211 -- Bryan Zepp Jamieson
