U.S. stocks plummet on fears recovery may not be sustainable
Tuesday 1st September, 2009
Stocks were sharply lower on Wall Street Tuesday as investors sold into rallies over fears the turn in the economy may not last.
The moves lower took traders by surprise as further signs the economy was recovering came with the release of manufacturing and houses data.
The sharp recovery in the major indices since the March lows have however contributed to the caution in markets in recent days.
The Institute for Supply Management revealed that U.S. manufacturing increased in August for the first time in seventeen months.
The National Association of Realtors released data showing pending home sales climbed in July to the highest level in a year.
"Along with the good news, there were also some notes of caution," Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh told the Reuters newsagency.
"The home tax credit initiative is coming to an end in November and I think the Realtors' association understands this is pulling forward sales and that demand for homes is going to dry up."
An $8,000 tax credit available for first-time home buyers expires before December 1.
Bank shares were hit hard in particular on Tuesday with major falls recorded by JP Morgan and Citigroup.
At the close of trading the Dow Jones Industrials were down 185.68 points or 1.96% at 9,310.60.
The Nasdaq Composite was off 40.17 points or 2.00% to 1,968.89.
The Standard and Poor's 500 was down 22.58 points or 2.21% to 998.04.
Surprisingly the U.S. dollar was up sharply. Around the New York close Tuesday the euro was trading at 1.4214. The British pound tumbled to 1.6155, while the Swiss franc eased to 1.0656.
The Australian dollar cracked, falling to .8254, while the Canadian dollar blew out to 1.1040.
The Japanese yen went against the trend, albeit in a very minor way, firming to 92.85.
Tuesday 1st September, 2009
Stocks were sharply lower on Wall Street Tuesday as investors sold into rallies over fears the turn in the economy may not last.
The moves lower took traders by surprise as further signs the economy was recovering came with the release of manufacturing and houses data.
The sharp recovery in the major indices since the March lows have however contributed to the caution in markets in recent days.
The Institute for Supply Management revealed that U.S. manufacturing increased in August for the first time in seventeen months.
The National Association of Realtors released data showing pending home sales climbed in July to the highest level in a year.
"Along with the good news, there were also some notes of caution," Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh told the Reuters newsagency.
"The home tax credit initiative is coming to an end in November and I think the Realtors' association understands this is pulling forward sales and that demand for homes is going to dry up."
An $8,000 tax credit available for first-time home buyers expires before December 1.
Bank shares were hit hard in particular on Tuesday with major falls recorded by JP Morgan and Citigroup.
At the close of trading the Dow Jones Industrials were down 185.68 points or 1.96% at 9,310.60.
The Nasdaq Composite was off 40.17 points or 2.00% to 1,968.89.
The Standard and Poor's 500 was down 22.58 points or 2.21% to 998.04.
Surprisingly the U.S. dollar was up sharply. Around the New York close Tuesday the euro was trading at 1.4214. The British pound tumbled to 1.6155, while the Swiss franc eased to 1.0656.
The Australian dollar cracked, falling to .8254, while the Canadian dollar blew out to 1.1040.
The Japanese yen went against the trend, albeit in a very minor way, firming to 92.85.
