- The Washington Times - Wednesday, January 14, 2009

Wall Street closed mixed after seesawing in a narrow range Tuesday despite a good-news government report showing that the nation’s trade deficit between October and November plummeted to its lowest level since November 2003.

Investors apparently kept their buying in check because of worries about corporate earnings in the face of a worsening recession and a troubled financial sector.

At the close, the Dow Jones Industrial Average dropped 25.41, or 0.30 percent, to 8,448, off its low for the day.

The tech-heavy Nasdaq rose 7.67, or 0.50 percent, to 1546. The broader Standard & Poor’s 500 inched up 1.53, or 0.17 percent, to 871.

Much of the reason for the drop in the deficit to $40.4 billion in November was because of far lower demand for oil and a severe cutback in imports from China. But U.S. exports to China and elsewhere, chiefly farm products and heavy machinery, also registered big declines.

The Commerce Department reported that the trade deficit registered a 28.7 percent decline from the $56.7 billion deficit in October, which the Associated Press reported was a bigger decrease than economists had expected.

Further declines are expected in the months ahead because of the worsening recession as Americans buy less and less because they are saddled with debt, an unemployment rate of 7.2 percent, worries about their jobs and paying for mortgages worth more than their homes.

Moreover, the price of a barrel of oil continues to decline - below $38 Tuesday - after a high of $147.27 in July. That will help the trade deficit as well as being good news for motorists. Through November, the trade deficit hit an annual rate of $688.2 billion, down from the $700.3 billion in 2007, the Commerce Department said.

On the export side, which has been a plus for the U.S. economy, the value of the goods and services shipped abroad dropped to $142.8 billion in November, down 5.9 percent from October. It marked the lowest level of exports in 14 months, which could hurt the earnings of major U.S. exporters, further worsening job prospects.

But imports plunged 12 percent to $183.2 billion, their lowest point in two years. One reason: Imports of petroleum products dropped 36.5 percent to $23.6 billion.

Imports from China declined 17.5 percent to $23.1 billion in November because Americans bought less, as American retailers can attest as their sales continue to shrink in the midst of some of the biggest sales in decades.

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