Recession fears pummel Wall Street
Pastor Dale Morgan
Recession fears pummel Wall Street*
From correspondents in New York
January 18, 2008 08:36am
Article from: Agence France-Presse
US shares plummeted overnight as bleak data on housing and manufacturing
and a huge loss from Merrill Lynch fanned recession fears and prompted
investors to run for cover.
The Dow Jones Industrial Average sank 306.95 points or 2.46 per cent to
close at 12,159.21, the lowest level for blue chips since March 2007.
The tech-heavy Nasdaq composite lost 44.56 points or 1.86 per cent to
2350.03 and the broad-market Standard & Poor's 500 dropped 39.36 points
or 2.83 per cent to 1333.84.
The broad-market index fell to its lowest level since September 2006.
Selling accelerated after a report from the Philadelphia Federal Reserve
showed its manufacturing index sliding to minus 20.9 from minus 1.6
points in December.
"This data point screams recession," said TJ Marta, analyst at RBC
Capital Markets.
A separate report showed a sharp 14.2 per cent slide in US housing
starts, capping a horrendous year for the property market.
Comments from Federal Reserve chairman Ben Bernanke which endorsed the
idea of an economic stimulus plan to revive flagging growth only left
investors more unsettled.
"Ben Bernanke's comments on a potential economic stimulus package from
Congress did little to instill confidence among traders," said Joseph
Hargett at Schaeffer's Investment Research.
Al Goldman, at AG Edwards, said the prospect of recession was still the
main fear for Wall Street.
"Concerns about a possible recession and its impact on corporate
earnings remain the major problems overhanging investor emotions," he said.
"A recession, which we continue to believe is the most likely economic
scenario, will have a big negative impact on corporate earnings."