06-07-2008, 01:53 AM
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Machiavelli Incarnate
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Join Date: Jun 2006
Location: Mid-south
Posts: 12,129
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Dow plunges 395
But we are not in a recession? According to Bush...
Quote:
Dow plunges 395 as crude tops $139
Crude has its biggest one-day gain ever, and the Dow's loss is its worst in 15 months, pushing the index down about 3.4% for the week. Financial stocks are hit the hardest. The Labor Department says the economy lost 49,000 jobs in May; unemployment spikes to 5.5%.
Latest Market Update
June 06, 2008 -- 16:25 ET
[BRIEFING.COM] Unless you were long oil futures, there was nothing pretty about Friday's session, which was governed by a relatively disappointing employment report for May and a stunning rise in oil prices.
Crude oil closed above $138 a barrel for the first time on Friday, causing the Dow Jones industrials to fall nearly 400 points and increasing fears that that the damage to an already-soft economy from high fuel costs will worsen.
The Dow fell about 395 points, or more than 3.1% to 12,210. It was the worst loss for the blue chips since Feb. 27, 2007, when the Dow fell 416 points, or 3.3%, in the wake of a selloff in stocks in China.
The Standard & Poor's 500 Index fell 43 points, or 3.1%, to 1,361, and the Nasdaq Composite Index dropped 75 points, or 3%, to 2,475.
The Dow Jones Transportation Average ($DJT) was off 243 points, or 4.4%, to 5,250, as airline stocks in particular were staggered by the oil price increases. The point loss was its worst since Sept. 17, 2001, the first day of trading after the 9/11 terror attacks. The Amex Airline Index ($XAL.X) was off 6.9% to 19.22.
Crude oil jumped $10.75 a barrel to a new closing high of $138.54 and briefly touched $139.12. Most analysts said the falling dollar was the catalyst that sent crude higher.
But as big a problem was panic buying as oil appears to be in a price bubble, said Stephen Schork, who runs The Schork Report, a newsletter covering the energy markets.
The greenback was off 1.5% against both the euro and the Japanese yen. The U.S. Dollar Index, which measures the dollar against a basket of 12 currencies, was off 0.8% to 72.365.
The dollar is down 7.4% this year against the euro and 6.2% against the yen. The dollar index is off 5.7% on the year.
Gasoline futures were up 6.4% to $3.5480, which means consumers face higher prices at the gas pump. AAA's daily survey of gasoline prices showed the national average retail price of gas at $3.986 a gallon, down slightly from Thursday but up 95 cents from a year ago.
The market's plunge started when the Labor Department issued a surprisingly gloomy report on U.S. unemployment.
The national unemployment rate jumped to 5.5% in May from 5% in April, the biggest one-month gain since February 1986. Nonfarm payrolls fell 49,000 from April to May, in line with economists' estimates, and the Labor Department revised payroll data for April and March lower as well.
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