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| Wall Street may find respite from turmoil in quiet week |
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Time is GMT + 8 hours
Posted: 9-Nov-2008 01:01 hrs |
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| Traders work on the floor of the New York Stock Exchange on November 7, 2008 in New York City. After weeks of high volatility, Wall Street may find next week's quiet macroeconomic calendar the perfect opportunity to regroup and plan for the final stretch of the dangerous year. |
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After weeks of high volatility, Wall Street may find next week's quiet macroeconomic calendar the perfect opportunity to regroup and plan for the final stretch of the dangerous year.. With no major announcements scheduled, "investors may have an opportunity to ... assess the damage that has been done through the last several weeks," said Gina Martin, an analyst at Wachovia Securities.. For now, "a lot of investors are sitting on the sidelines and waiting to see how the market trades until the end of the year," she added.. After a spectacular 18 percent rise over six sessions, Wall Street was hammered last week -- once again in volatile trade -- as the brutal reality of the rapidly accelerating financial crisis sank in.. The economic downturn rapidly overshadowed the euphoria over the election of Democrat Barack Obama late Tuesday as the 44th president of the United States.. The "Obama effect" lasted only one day, as voters headed to the polls, lifting the markets in the biggest election day rally in history.. Unemployment worries drove the blue-chip Dow Jones Industrial Average down nearly 1,000 points in the next two days: Wednesday the ADP survey showed the private sector shed 157,000 jobs in October, far more than already pessimistic analysts had expected, and Thursday, investors braced for a grim October jobs report due from the government on Friday.. Their fears were more than proved right. The US October unemployment rate rose to its highest level since 1994, official data showed Friday, with analysts forecasting it to move even higher in Obama's first year as president.. The Labor Department said the jobless rate rose to 6.5 percent as the world's largest economy shed 240,000 jobs during the month amid the credit squeeze and downturn.. For this first week of November, the Dow fell 4.0 percent to 8,943,81 points, after gaining more than 11 percent in the previous week.. The tech-heavy Nasdaq dropped 4.27 percent to 1,647.40 and the broad Standard & Poor's 500 ended 3.92 percent lower at 930.75.. The bond market renewed its safe-haven status. The yield on the 10-year Treasury bond fell to 3.780 percent from 3.970 percent last Friday, and than on the 30-year Treasury bond slid to 4.261 percent from 4.369 percent.. Next week, only the retail sales numbers on Friday were seen as having market-moving potential, according to analysts, because of concerns that consumers' growing unwillingness to spend will spell disaster for the all-important holiday shopping season.. On the corporate calendar, the quarterly earnings season winds down.. Insurance giant AIG, partly nationalized when the government stepped in to rescue it from collapse, is scheduled to publish third-quarter financial results on Monday, and Wal-Mart, the world's biggest retailer, on Thursday.. The past week was littered with poor earnings reports, profit warnings and layoffs.. Toymaker Mattel, chip manufacturer AMD, electronics retailer Circuit City and credit card firm American Express all announced job cuts.. In the battered auto industry, carmakers slashed jobs amid heavy losses and asked the government for help to survive plummeting sales and tightening credit.. General Motors, the largest US automaker, acknowledged Friday it was on the brink of collapse in a cash crisis.. For Marc Pado, analyst at Cantor Fitzgerald, investors already are looking ahead to companies' fourth-quarter results.. "Expectations are down in the dumps," he said.. "Amid recession, we expect President-elect Obama and the enlarged Democratic majority in Congress to speedily enact a very large fiscal stimulus bill. Unfortunately, its efficacy is likely to fall well short of its high price tag," said Peter Kretzmer, senior economist at Bank of America.. David Rosenberg, chief North American Economist at Merrill Lynch, said that the fact the stock market tanked Thursday even in the face of a seven percent slide in oil prices "is a sign equities and commodities are suffering from the same fate -- a recession that has gone global." — AFP
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