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Wall Street suffered another beating Wednesday at the hands of investors panicking over the state of large banks, as they flocked from stocks and sent safe-haven areas like gold soaring.
The Dow and S&P 500 fell over 4.5% today, while the Nasdaq composite dropped 3.6%, as concerns over the health of the financial sector intensified following the decision of Lehman Brothers to file for Chapter 11.
Stocks fell sharply at the opening bell Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.
Stocks looked set to plummet Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.
Stocks finished lower Tuesday as weakness in technology stocks sucked the air out the earlier rally inspired by oil's drop and the dollar's surge.
After jumping up over 200 points this morning, the Dow has reversed course and is now in negative territory for the day. The S&P 500 also jumped, rising above 1300 before falling back down. Interestingly, at one point during the swing, the S&P was down more than the Dow was down. The Dow is priced roughly 9 times higher than the S&P 500. Given the difference in scale, it is somewhat unusual to see this happen when they move in the same direction.
Stocks came charging out of the gate, inspired by oil's drop and the dollar's surge, but weakness in technology stocks sucked the air out of the rally.
Stocks kicked off September with a rally, inspired by the more than $7 drop in oil prices and a surge in the dollar.
Stocks shot out of the gate Tuesday as the price of oil plunged more than $7 and the dollar surged.
Several major U.S. refiners said early checks on Monday showed their facilities were unharmed by Hurricane Gustav, but at least two others were said to be considering dipping into the U.S. Strategic Petroleum Reserve to keep operations going after the storm shut down key waterways.
Gustav weakened to a Category 1 hurricane as it approached the Louisiana cities of New Iberia and Lafayette with maximum wind speeds of 90 mph.
Wednesday's weather models reinforce that Hurricane Gustav could be the most powerful storm to rip through Gulf of Mexico oil and gas production areas since Katrina. It will be the first storm to test the industry's efforts to reinforce its oil and gas production infrastructure.
The oil market's taking notice that Hurricane Gustav could be the first major storm to wreak havoc with Gulf of Mexico oil production areas in several years, and it should be clear by the weekend just how serious that threat could be. "This could be the most significant storm in that area since Katrina and Rita" in 2005, said John Kilduff, M.F. Global senior vice president.
The market rallies on Friday with the Dow, NASDAQ and S&P all up 1% or more, on light volume, but Friday's gains are not enough to boost the market's weekly performance out of negative territory. Energy stocks dominate.
US stocks ended mixed Thursday as a jump in oil prices boosted oil stocks and speculation about a government bailout of Fannie Mae and Freddie Mac, and a possible takeover of Lehman Brothers, gave investors some hope that relief is coming.
Ronald Weiner, president and CEO of the RDM Financial Group, says his two favorite stock picks are in the defense and energy sectors.
Tim Parker, an energy analyst at T. Rowe Price, says his best stocks picks are in the oil services sector.
Oil production has begun falling at all of the major Western oil companies, and they are finding it harder than ever to find new prospects even though they are awash in profits and eager to expand.
Do you believe that financials, pharma and telecom can maintain through an economic downturn? If so, you might want to take a look at the Dow Industrials where some of the largest companies in the world are currently offering investors notably large dividend yields.
Stocks ended a mundane week mixed, despite modest gains Friday fueled by plunging oil prices that nevertheless couldn't offset a cautionary trading environment.