Wall Street Starts to Absorb Losses

February 22, 2008

(Long Island, N.Y.) Wall Street opened trading today sluggishly as investors awaited economic reports due next week from the Department of Labor and other agencies. The Dow Jones lost 60.57 points which is 0.49 percent lower when the day started. The NASDAQ absorbed a 18.73 point decline while the Standard and Poor 500 also lost 7.65 points to settle at 1334.88 points.

Yesterday, the Dow Jones Industrial lost over 140 points as investors pulled back on trading after the Federal Reserve Bank of Philadelphia announced a weak reading on regional manufacturing. Another concern that led to a lethargic trading yesterday was the news that Wall Street’s Conference Board’s monthly index of leading economic indicator dropped.

The Fed released a statement on their monthly manufacturing index which clearly reads recession. For the month of February, Philadelphia Fed said that its business activity index dropped to negative 24.0 adding to the losses incurred on January which had a negative 21.0 reading and on the last two months of 2007. “This is clearly pointing to an economy that is in recession,” said Eric Green, economist at Countrywide Financial in Calabasas, California.

Pierre Ellis, a senior economist at Decision Economics in New York added, “Four monthly declines in a row ordinarily is taken as an indicator of a manufacturing recession,”

Experts acknowledged today the importance of the reports set to be released next week on existing home sales and durable goods which are key barometers for economic struggles or growth as a crucial point in predicting the pace at which the market either expands or decreases. An opinion evidenced in today’s trading, as investors are hesitant to buy stocks amidst concerns for a disastrous report which led to early day trading losses. Investors see little optimism in current economic trend even after drastic measures were made by Feds and White House to revive our economy. Instead, most are concerned of inflation on the horizon, a sentiment voiced by many.

“I find it funny that people who didn’t think there was any inflation in the pipeline are now talking about stagflation,” said Barry Ritholtz, CEO director of equity research for Fusion IQ. “This is nothing like the 1970’s, which was a pretty dismal period and not just because of polyester and disco.”

Posted by News LI Editor · Edited by Brianna - Filed Under Business