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Dow Jones and Economy Down…despite Debt Deal and Obama’s “Stimulus”

Posted by FactReal on August 4, 2011

(Dow Jones Industrial Average – 8/4/2011)
WALL STREET GETS THE MESSAGE: LIBERAL POLICIES ARE NOT WORKING
Despite Obama’s big government spending, the economic sector continues to show signs of weakness. Everywhere you look, the direction is downward. Today, the Dow Jones Industrial Average fell 513 points to 11,384 – erasing its gains for the year in the worst day of trading since the 2008 financial crisis. (On Sept. 29, 2008, the Dow lost 777 points after the House initially failed to approve the TARP bank bailout.) Over the last 10 trading days stocks have lost more than 10% (the traditional definition of a market correction.)

Unemployment is at 9.2%. Manufacturing and consumer spending is down. The new debt-ceiling deal will add $7 trillion or more to our national debt in the next decade. After the debt-ceiling fiasco, it is clear that tax hikes and more wasteful spending will be the Democrats’ prescription. Weak Republicans will be bullied again into submission with fake threats of debt defaults or worse.

Thus, it is not surprising that consumers and corporations are opting to keep their cash. What’s keeping them from investing? Uncertainty. Businesses are not hiring. “They don’t know if U.S. government debt will be downgraded from AAA, setting off a spike in rates across the economy. They don’t know what their tax rates will be next year. They see hundreds if not thousands of new regulations coming down the pipeline. And they hear politicians on the left — from Obama to Reid and Pelosi — routinely demonizing them. Who invests and creates jobs in such an environment?”

Wall Street’s Awful Day by the Numbers

  Here’s a quick look at some of the key numbers at the end of what was a brutal day in New York trading:

Dow Jones Industrial Average (^DJI): Down 512.76 points, or 4.31%, to 11,383.68
S&P 500 (^GSPC): Down 60.27 points, or 4.78%, to 1200.07
Nasdaq Composite (^IXIC): Down 136.68 points, or 5.08%, to 2556.39
Russell 2000 (^RUT): Down 45.98 points, or 5.95%, to 726.80
S&P 500 Volatility Index (^VIX): Up 8.28 points, or 35.41%, to 31.66
Number of Dow stocks that fell: 30 (out of 30)
Worst Dow stock on a percentage basis: Alcoa (AA), down 9.26% to $12.94
Best-performing Dow stock on a percentage basis: McDonald’s (MCD), down 1.47% to $82.48
-Percentage of stocks that fell on the New York Stock Exchange: 91
-Percentage of stocks that fell on the Nasdaq: 91
Oil prices: Down $5.49, or 5.97%, to $86.44 (4 p.m. ET)
Gold prices: Down $12.60, or 0.76%, to $1,650.80 (4 p.m. ET)

As for sectors of the market, the downturn was just as evident:

Banks: Dow Jones U.S. Banks Index (^DJUSBK), down 10.85 points, or 5.52%, to 185.72
Semiconductors: Philadelphia Stock Exchange Semiconductor Index (^SOX), down 22.07 points, or 5.82%, to 357.32
Computer hardware: Amex Computer Hardware Index (^HWI), down 17.25 points, or 5.14%, to 318.14
Transportation: Dow Jones Transportation Average (^DJT), down 255.44 points, or 5.14%, to 4711.74
Retail: S&P Retail Index (^RLX), down 23.04 points, or 4.47%, to 492.68
Homebuilders: Philadelphia Stock Exchange Housing Sector Index (^HGX), down 5.50 points, or 5.70%, to 90.95
Energy: Amex Oil Index (^XOI), down 83.91 points, or 6.79%, to 1151.53
Biotechnology: Amex Biotechnology Index (^BTK), down 135.86 points, or 10.61%, to 1144.93
Drug companies: Amex Pharmaceutical Index (^DRG), down 12.49 points, or 3.98%, to 301.63

Here’s how a few widely held tech stocks fared (this will probably look familiar):

Apple (AAPL): Down $15.20, or 3.87%, to $377.37
Microsoft (MSFT) Down 98 cents, or 3.64%, to $25.94
Cisco (CSCO) Down 67 cents, or 4.33%, to $14.82

 
 
 
 

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