Friends,
The day started with a lousy weekly unemployment claims number, then a rough Philly Fed number, and got worse as the news of the “not unexpected” downgrade of the credit ratings of 5 major U. S. banks by Moody’s (which will affect borrowing cost and possibly reserve requirements) fell over the markets in the afternoon. The result was a thrashing of stocks that we actually should have seen yesterday to be honest. Somehow the bulls managed to minimize the losses yesterday, but were overwhelmed by negativity today.
For the day, the Dow Jones Industrial Average was down 251 points to finish the day at 12,572. The S&P 500 was down 30 points to close at 1325. Gold was down $49 to trade near $1566 per ounce, and oil continued to collapse as WTI was down $3.07 to trade at $78.37. Maybe we’ll enjoy lower gasoline prices this summer.
Let’s put today’s move in perspective (yes, I do like to find the bright side of things). The S&P 500 ended the month of May at 1310, and was trading at 1278 at the close on June 1st. To give back some of June’s move, especially with a lousy economic backdrop is not really a surprise. Considering Europe and the rapidly slowing domestic economy (not to mention a slowing China), it’s amazing that the S&P is still in positive territory for the year. Read what you want into that.
We’ll let you know how the week ends. Have a nice evening everyone.
