A Litany of Concerns Send Stocks Reeling
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It was another wild down day on Wall Street Thursday as volatility continues to whiplash investors. Concerns over banks in Europe, a double dip recession and poor economic data had stocks pressured the entire session.
The Dow closed down 420 points, or 3.7 percent, to about 10,991. The Nasdaq fell 131 points and the S&P 500 fell 53 points.
Stocks started weak Thursday following a drubbing of stocks in Europe, driven by capital concerns at banks there. The Wall Street Journal further exacerbated concerns following a front-page story suggesting the U.S. Federal Reserve is very concerned about European banks which operate in the U.S. The Fed had recent meetings with officials from the European banks to discuss if the region had ample liquidity. The Fed seeks to avoid a repeat of 2008, which this time could lead to a spilling over to the U.S. banking sector.
Adding fuel to the "double dip" talk, Morgan Stanley lowered its global growth forecast and said the U.S. and Europe are "dangerously close to recession." The firm's 2011 forecast for global growth fell from 4.2 percent to 3.9 percent. The 2012 estimate was cut from 4.5 percent to 3.8 percent.
Further depressing investor sentiment was an awful Philadelphia Fed manufacturing survey. The index fell to -30.7, well below the +2.0 reading expected by economists, and down from a +3.2 reading in July. It was the largest decline in two years.
Gold surged to new record levels as investors ran for safe places to put their money. Gold last traded up $32.70 to $1,824.90 per ounce.
The Dow closed down 420 points, or 3.7 percent, to about 10,991. The Nasdaq fell 131 points and the S&P 500 fell 53 points.
Stocks started weak Thursday following a drubbing of stocks in Europe, driven by capital concerns at banks there. The Wall Street Journal further exacerbated concerns following a front-page story suggesting the U.S. Federal Reserve is very concerned about European banks which operate in the U.S. The Fed had recent meetings with officials from the European banks to discuss if the region had ample liquidity. The Fed seeks to avoid a repeat of 2008, which this time could lead to a spilling over to the U.S. banking sector.
Adding fuel to the "double dip" talk, Morgan Stanley lowered its global growth forecast and said the U.S. and Europe are "dangerously close to recession." The firm's 2011 forecast for global growth fell from 4.2 percent to 3.9 percent. The 2012 estimate was cut from 4.5 percent to 3.8 percent.
Further depressing investor sentiment was an awful Philadelphia Fed manufacturing survey. The index fell to -30.7, well below the +2.0 reading expected by economists, and down from a +3.2 reading in July. It was the largest decline in two years.
Gold surged to new record levels as investors ran for safe places to put their money. Gold last traded up $32.70 to $1,824.90 per ounce.
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