- The Washington Times - Wednesday, November 19, 2008

NEW YORK (AP) – Wall Street struggled to find a direction Wednesday, as investors, nervous about the fate of the nation’s top automakers, scoured more economic data for a sign of relief.

Though the latest reports provided more evidence that the economy remains in flux, investors vacillated, trying to hold on to the gains achieved in the previous session. Jolted by the most serious financial crisis in seven decades, the market has closed lower in the past four out of six sessions.

According to the Labor Department’s Consumer Price Index, consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount. While lower prices might be good for the consumer, they can hurt corporate profits. Lower prices also raise the threat of deflation, a prolonged bout of falling prices that hasn’t been seen in the U.S. since the Great Depression.

Meanwhile, a government report on the housing sector showed that the industry’s severe correction continues. The Commerce Department reported that construction of new homes plunged 4.5 percent last month to the lowest level on government records.

The market is also bracing for more testimony in Congress from the heads of General Motors Corp., Ford Motor Co., and Chrysler LLC. They are asking lawmakers for a massive infusion of cash to prevent millions of layoffs, stave off bankruptcy and stabilize the companies.

Investors are concerned at the repercussions should any of the three automakers collapse, an event that could ripple through an already battered economy. Congressional Democrats have proposed using part of the $700 billion financial bailout package to pump into the ailing auto industry, but Republicans oppose such an approach.

In the first half-hour of trading Wednesday, the Dow Jones industrial average fell 19.04, or 0.23 percent, to 8,405.71. Standard & Poor’s 500 index fell 3.76, or 0.44 percent, to 855.36, while the Nasdaq composite index fell 3.86, or 0.26 percent, to 1,479.41.

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