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Glum data cuts 360 off Dow

A barrage of distressing news, including yet another record high for oil, drove stocks sharply lower Thursday, hurtling the Dow Jones industrials down nearly 360 points to their lowest level in almost two years.

The market also worried about fresh signs of trouble in the financial, high-tech and automotive industries. Negative analyst comments sent shares of General Motors Corp. stock to their lowest point in more than three decades.

Oil futures shot past $140 after the head of OPEC predicted the price of a barrel of crude could rise well more than $150 this year and Libya said it may cut oil production.

That increases the odds that gasoline prices, which crossed a nationwide average of $4 a gallon weeks ago, will extend their advance and that goods and services across the economy will get ever more expensive.

The Dow dropped 358.41 points, more than 3 percent, to close at 11,453.42 — its lowest finish since Sept. 11, 2006. Investors rushed for the safety of Treasury bonds, regarded as a haven when the stock market is in turmoil.

The blue-chip index is 19 percent below its record close last October of 14,164.53.

Oil was far from the only worrisome factor driving stocks lower.

Citigroup Inc. stock fell sharply after an analyst gave it a "sell" rating and warned investors to expect less from the brokerage sector in an uneasy economy.

Disappointing forecasts from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors' moods and made the tech sector one of the steepest decliners.

Broader stock indicators also fell sharply, although not to their mid-March lows. The Standard & Poor's 500 dropped 38.82, about 3 percent, to 1,283.15, and the Nasdaq composite slid 79.89, or 3.3 percent, to 2,321.37.

The Dow and the S&P, which is off 18 percent from its highs of last fall, are close to the prolonged 20 percent decline that traditionally indicates a bear market. Many analysts would argue Wall Street has had a bear market mentality for months.

The great fear on Wall Street has been that rising prices and worries about their finances will force Americans to curb spending and reinforce the economic decline.

"This is unfortunately kind of a slack period. We're waiting for second-quarter earnings," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, pointing to the uptick in housing sales. "Until then, we have this very negative attitude among investors and everyone seems to be latching onto negative news and shrugging off the positive news."

Glum data cuts 360 off Dow 06/26/08 [Last modified: Monday, November 1, 2010 1:34pm]

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