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Log inWall Street to begin July on shaky ground
Wall Street to begin July on shaky ground
by Outspoken on Sun Jun 29, 2008 5:56 pm
Wall Street to begin July on shaky ground
By MADLEN READ
AP Business Writer
NEW YORK - The year is nearly halfway over, and Wall Street appears to be on even shakier ground than when it began 2008. And this shortened week ahead of the Fourth of July holiday is unlikely to bring the market enough proof that the economic climate is improving.
The Dow Jones industrial average is down more than 14 percent for the year and has given up all the gains it made since September 2006.
Back in January, investors knew there was potential for the price of oil, which was on the verge of $100 a barrel, to keep rising, but most didn't predict crude would surpass $140 a barrel. Economists figured that home prices had further to fall, but no one was sure how much. And when banks said the worst of the credit crunch was behind them in January, and then again in April, traders believed them.
Now, all the angst that has upended the stock market over the past year is back and more intense than ever. The main reason is that there is no historical precedent for what's happening in either the energy or credit markets.
"Take the models, throw them in the trash," said David Kotok, chief investment officer of Cumberland Advisors. "Stocks do not like uncertainty, and they've got plenty of it."
It's possible that Wall Street is reaching its bottom, but investors — who have been burned several times already — do not want to make that bet until they see clear, positive signs that both inflation and economic growth are under control.
Wall Street this week is going to be watching the price of oil, as well as economic data. The most notable economic reading will likely be Thursday's June employment report from the Labor Department, which is expected to show the sixth month of jobs losses and only a slight improvement in the unemployment rate.
Many market watchers believe the energy market is a bubble that will eventually burst, but no one knows when; and even if there is a significant pullback this week, the relief might prove temporary.
"The oil prices rise has been surprising to nearly every forecaster," Kotok said, noting that at $140 a barrel, crude imports will cost the United States approximately $700 million per day.
http://news.yahoo.com/s/ap/20080629/ap_on_bi_ge/wall_street_week_ahead;_ylt=AozsAXHEGvSS_DaF3KdbkHGs0NUE
By MADLEN READ
AP Business Writer
NEW YORK - The year is nearly halfway over, and Wall Street appears to be on even shakier ground than when it began 2008. And this shortened week ahead of the Fourth of July holiday is unlikely to bring the market enough proof that the economic climate is improving.
The Dow Jones industrial average is down more than 14 percent for the year and has given up all the gains it made since September 2006.
Back in January, investors knew there was potential for the price of oil, which was on the verge of $100 a barrel, to keep rising, but most didn't predict crude would surpass $140 a barrel. Economists figured that home prices had further to fall, but no one was sure how much. And when banks said the worst of the credit crunch was behind them in January, and then again in April, traders believed them.
Now, all the angst that has upended the stock market over the past year is back and more intense than ever. The main reason is that there is no historical precedent for what's happening in either the energy or credit markets.
"Take the models, throw them in the trash," said David Kotok, chief investment officer of Cumberland Advisors. "Stocks do not like uncertainty, and they've got plenty of it."
It's possible that Wall Street is reaching its bottom, but investors — who have been burned several times already — do not want to make that bet until they see clear, positive signs that both inflation and economic growth are under control.
Wall Street this week is going to be watching the price of oil, as well as economic data. The most notable economic reading will likely be Thursday's June employment report from the Labor Department, which is expected to show the sixth month of jobs losses and only a slight improvement in the unemployment rate.
Many market watchers believe the energy market is a bubble that will eventually burst, but no one knows when; and even if there is a significant pullback this week, the relief might prove temporary.
"The oil prices rise has been surprising to nearly every forecaster," Kotok said, noting that at $140 a barrel, crude imports will cost the United States approximately $700 million per day.
http://news.yahoo.com/s/ap/20080629/ap_on_bi_ge/wall_street_week_ahead;_ylt=AozsAXHEGvSS_DaF3KdbkHGs0NUE
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Plato (427-347 BC)
Plato (427-347 BC)
