Friday, July 14, 2006

Wall Street blues

(Source Article: Dow gives up gains for the year - CNN)

Record oil prices, Mideast tension and poor retail sales have proven to be a devastating three-hit combination on US markets this past week. The world’s most notable stock market has lost approximately 400 points since close of trade on Tuesday, and is on the brink of falling into the red for the year. Additionally, the Nasdaq and S&P 500 are already in the negative.

Having remained stable since February, retail sales took their first dive since that month, and fell 0.1 percent in June. This drop in sales comes after a prediction by economists that sales would grow by 0.4 percent. Consumer spending accounts for two-thirds of all economic activity in the US, and with high gas prices weighing down on household budgets, analysts worry. (see Retail sales fall into negative territory - CNN)

Experts do not expect a cease-fire to occur between the warring factions in the Middle East, and thus further expect the markets to remain under pressure. On Friday, the Dow was down at 10,740.63; S&P 500 at 1,234.53 and the Nasdaq was at 2,038.36. (see US stocks fall on Mideast fighting - Reuters)

After hitting a comparative high on May 10th, the Dow has been reeling from the effects of worries about interest rates, slowing economic activity and now geo-political tension in the Middle East. All of these have combined to induce increased selling of stocks on Wall Street.

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