Quote:
Originally Posted by Mr. Sandman
Thanks for your advice.  You sound like the S&P rating agencies who downgraded the banks after their collapse.
No one will invest in america (small "a") anymore or want to risk their savings to start a small business with 50%+ total tax burden.
But we will negotiate with terrorists and the French will think we are nice people, that's all that really counts right?  |
Yup, you have a fundamental lack of knowledge of markets and thus you probably shouldn't invest as the article states stocks have fared better under Dem. admin.
Thanks but I'll retire with plenty of money, I'm highly educated and make plenty of $. Maybe we won't have to cry like little school girls when we get mad the French or other allies won't back us blindly.
Stocks erased all their gains from Tuesday’s rally — the biggest on a presidential Election Day in 24 years — as investors banked their profits and dealt with another round of bleak economic news, this time about businesses that compose nearly 90 percent of the economy.
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The Dow Jones industrial average tumbled 486.01 points on Wednesday after a daylong sell-off accelerated in the final hour, sending the index to 9,139.27, its lowest level in a week. The broader Standard & Poor’s 500-stock index fell 5.3 percent, or 52.98 points, to 952.77, and the Nasdaq composite index lost 5.5 percent, or 98.48 points, to 1,681.64.
On Wall Street, the selling began early after a report showed that activity in the nation’s service industries contracted in October, falling at the fastest rate since records began in 1997.
The index by the Institute for Supply Management dropped to 44.4, from 50.2 in September, on a scale where readings below 50 indicate contraction, the group said on Wednesday.
It was the latest in a string of discouraging data this week on the nation’s construction, manufacturing and service industries, crucial pillars of the American economy that have all suffered this fall.
“In short, horrible,” Ian Shepherdson of High Frequency Economics said of the report. “But only to be expected in the wake of the equity plunge and the subsequent collapse in confidence. We don’t expect the headline to drop much more.”
All 30 stocks in the Dow declined, with financial shares faring worst. Shares of Bank of America, Citigroup and Merrill Lynch all fell more than 11 percent. The big insurers Ambac and MBIA posted deep losses for last quarter and their shares lost 41 percent and 22 percent, respectively.
“I think anytime you do see a rally like we’ve been having, there will always be a little bit of pullback when people wake up and see things like today’s headline number on nonmanufacturing activity, which was the lowest of all time,” Michael Feroli, an economist at JPMorgan Chase, said. “If there’s data out, there’s going to be bad news out. That will tend to keep market enthusiasm a little bit contained.”
Earnings also disappointed at several major businesses, offering a bleak assessments of the current economy. GMAC, the finance company partly owned by General Motors, said that it lost $2.52 billion in the third quarter and that its mortgage unit, ResCap, was struggling to survive. Time Warner, the media and entertainment juggernaut, reported a higher-than-expected profit for the third quarter but lowered its outlook; its stock dropped 6.3 percent.
Crude oil prices dropped $5.23 a barrel to settle at $65.30.
The Treasury’s benchmark 10-year note rose 6/32, to 102 13/32. The yield, which moves in the opposite direction from the price, was at 3.70 percent, down from 3.72 percent late Tuesday.
Wall Street will now turn to Friday’s employment report from the Labor Department, which economists expect will show that 200,000 jobs were lost last month. A separate report released on Wednesday by Automatic Data Processing, a private group, showed that private companies cut an estimated 157,000 jobs in October, the most in almost six years.
The A.D.P. report is considered volatile by economists and has been a poor predictor of this year’s employment figures from the government. Still, investors can refer to it as a gauge for Friday’s more important data, and the news was not good. Layoffs spread from automakers, financial and housing-related companies to retailers and other services as the downturn deepened.
For investors seeking a silver lining, Wednesday’s market downturn seemed to indicate that Wall Street was once again reacting in predictable ways to negative news. For weeks, traders were in crisis mode, obsessing about arcane credit gauges like Ted spreads and credit-default swaps, and wondering about the outcome of the election. On the top of the wish list for investors was a return to stability.
“The market is starting to focus on normal things, like company fundamentals, earnings, macroeconomic data, employment, even market technicals like trend lines,” said Steve Sachs, director of trading at Rydex Investments. “After four or five weeks where none of that mattered, this is the first week we are thinking about that. Markets are moving in a more orderly way.”
For those curious about the connection between stock markets and presidential elections, Wednesday’s declines fit in with historical precedent. Since 1888, on average, stocks fell 0.5 percent from Monday to Wednesday of a presidential election week when the Democrats took the White House, according to Jeremy J. Siegel, a professor at the Wharton School. (A Republican victory brought an average return of 0.7 percent.) This week, stocks fell about 1.5 percent over the same period.
Over the full four-year term, stocks have historically fared better under Democratic administrations.
Stocks in Frankfurt, London and Paris all fell about 2 percent.
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