- The Washington Times - Tuesday, November 4, 2008


The stock market shrugged off another disappointing economic report Tuesday and staged a presidential Election Day rally.

Although factory orders plunged in August for the second month in a row, the Dow Jones Industrial Average gained more than 3 percent, closing above 9,500 for the first time since Oct. 6.

As Americans headed to the polls to cast their votes in elections for president and Congress that were dominated by economic issues, the government reported that overall U.S. factory orders declined in August and demand for durable goods other than autos and airplanes plunged by a record amount.

After falling 4.3 percent in July, total factory orders dropped another 2.5 percent in August, the Commerce Department reported Tuesday morning.

This two-month plunge in the value of orders is partially a reflection of the plunge in commodity prices (for primary metals, for example), said Charles W. McMillion, president and chief economist for MBG Information Services. But it is also yet another indicator of the sharply worsening economic decline even before the more serious troubles in October.

The demand for non-durable goods, such as gasoline and clothing, declined by 5.5 percent, the steepest drop since September 2006.

Buttressed by increases in the demand for autos and aircraft, orders for durable goods increased by 0.9 percent in August. Aside from cars and planes, however, orders for durable goods plunged 3.7 percent. It was the biggest decline in that category since the government began keeping these records in 1992.

In its biggest Election Day rally in 24 years, the Dow Jones Industrial Average gained 305.45 points (3.3 percent) to close at 9,625.28. In 1984, when President Ronald Reagan crushed Democratic nominee Walter Mondale, the Dow set its previous presidential Election Day rally by gaining 1.2 percent.

The broad-based Standard & Poor’s 500 stock index jumped 4.1 percent Tuesday, closing at 1,005.75 after gaining 39.45 points. The tech-heavy Nasdaq Composite Index gained 53.79 points (3.1 percent) to close at 1,780.12.

On the New York Stock Exchange, gains outnumbered losses by nearly four to one.

The U.S. Dollar Index, which measures the greenback against six foreign currencies, suffered a sharp decline of 2 percent on Election Day.

Light, sweet crude oil jumped $6.62 per barrel to $70.53 on the New York Mercantile Exchange. Crude oil peaked above $147 per barrel in July.

In Europe, the FTSE 100 in London gained 4.4 percent, and Germany’s DAX was up 5 percent. In Asia, Japan’s Nikkei 225 gained 6.3 percent, and the Hang Seng in Hong Kong was up 0.3 percent.

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