- The Washington Times - Saturday, June 28, 2008

NEW YORK | Wall Street ended a depressing week with another big loss Friday, with the Dow Jones Industrial Average falling more than 100 points amid escalating worries about high oil prices and fallout from the credit crisis. The major indexes all were down more than 3 percent for the week.

The Dow fell nearly 460 points in the last two sessions of the week and reached its lowest point since September 2006.

Investors on Friday again were confronted with a seemingly relentless stream of troubling news about the financial sector. Moody’s Investors Service said it is reviewing investment bank Morgan Stanley for a possible downgrade. There also were more reports that Merrill Lynch & Co. might have to write off nearly $6 billion of risky mortgage-backed debt.

In addition to anxiety about the financials, the market watched oil’s march higher — the price of crude rose to a new record of $142.99 a barrel on the New York Mercantile Exchange. Wall Street remains concerned that higher commodity prices will slam consumers with elevated costs for energy and food, as well as other goods if cash-strapped companies decide to pass along the rising costs.

“People are trading with a lot of emotion,” said Alexander Paris, an economist and market analyst for Chicago-based Barrington Research. “I think the market is trying to make a bottom, but the question is will it hold there or just crash through. It feels just like the top of the technology bubble in 2000, you know there’s something wrong but it is hard to time it.”



Investors got little solace from economic data released Friday. The Commerce Department said spending rose 0.8 percent in May, as taxpayers started receiving their stimulus checks. The increase was higher than the 0.7 percent economists predicted. The report also said personal incomes surged 1.9 percent — significantly more than anticipated. After taxes, incomes surged 5.7 percent, the largest amount in 33 years.

The Dow fell 106.91, or 0.93 percent, to 11,346.51, compounding Thursday’s 358-point skid. The blue-chip index is down 19.9 percent from its record high close of 14,164.53 in October, and is on the verge of the 20 percent pullback that is considered the threshold for a bear market.

Broader stock indicators also closed lower. The Standard & Poor’s 500 Index fell 4.77, or 0.37 percent, to 1,278.38. The S&P;, the index most closely watched by market professionals, is down 18.3 percent from its October high.

The Nasdaq Composite Index fell 5.74, or 0.25 percent, to 2,315.63.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

 

Click to Read More and View Comments

Click to Hide