Streams

Bad Day on Wall Street As Dow Plunges More than 500 Points

Thursday, August 04, 2011

Bad day for the markets.

The Dow Jones fell 513 points, or more than 4 percent. The S&P 500 lost 60 points, nearly 5 percent.  And the Nasdaq shed 137 points, down 5percent.

For the Dow, all of the gains of the year are gone. One financial advisor described it as “rip your face off rally.”

Why? 

Continued worries about Europe, Italy and Spain in particular.  Also, some of the sell-off could be attributed to the monthly jobs report due out tomorrow, but that's speculation often heard when the market drops the day before the report.

Whatever tomorrow's jobs number, unemployment is too high.  14 million people are out of work.  Add in the number of unemployed combined with the underemployed and discouraged comes in around 25 million.   In a healthy economy, the country needs to create about 150,000 jobs each month to tread water.  

The latest results of consumer spending fell 0.2% as our incomes barely increase (0.1%).   Consumer sentiment has dropped to levels not seen since the recession was almost declared officially over in June 2009.

With people worried about the future, frustrated and worried about the debate in Washington over the debt ceiling, no wonder the national savings rates has increased. Then again, after years of being negative, with Americans spending more than they were bringing in, it's a good thing we are saving more.  Unfortunately, it comes at a time when our spending could help create jobs.  

All the while keeping in mind that corporations are sitting on huge piles of cash and opting not to hire, partially because of a lack of demand and because they are worried about the state of the economy.

There could some signs of life.  Back-to-school spending was strong last month, sales were up 4.6% compared to last year.  The worry – sorry – is that what consumers are buying are necessities and discounted ones at that.  Will the spending continue, especially as gas prices have been steadily rising.

Stay tuned for tomorrow, Friday, 8:30am when the July jobs report will be released.  The expectation is about 84,000 jobs. 

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Comments [1]

Joe Zrnchik from Chicago, IL

Looks Like Ron Paul War Right

Everything In The MSM Is Lies - Read The Truth And See How It Stacks Up

Western Media Humiliated By Rebel Lies

http://members.beforeitsnews.com/story/889/428/Western_Media_Humiliated_By_Libya_Rebels_Lies.html

Lockerbie Bombing an Iranian Operation - Not Libyan

http://members.beforeitsnews.com/story/843/060/Pan_Am_Flight_103_Lockerbie_Bombing_an_Iranian_Operation_-_Not_Gaddafi.html

Day of Rage in D.C.

http://beforeitsnews.com/story/462/358/Americans_Demand_for_Redress_of_Grievances_or_Day_of_Rage_in_Washington_D.C._on_October_6th,_2011.html

Aug. 05 2011 06:00 AM

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