Abysmal Showing at Wall Street

March 7, 2008

(Long Island, N.Y.) Wall Street absorbed heavy losses yesterday as investor’s initial fears of dreadful economic figures translated into reality earlier this week to help drive off activity trading and keep optimism in check.

Several determining forces handed the Stock Market a devastating blow which included surging numbers for home foreclosures threatening to break record levels during the last quarter of 2007 which the Mortgage and Bankers Association reported last Wednesday. Another factor heavily affecting Wall Street are concerns coming out from the Credit industry involving Thornburg Mortgage Inc. and a Carlyle Group bond fund after it revealed bad investments backed by mortgages. Both companies failed to meet marginal figures, which are payments to guarantee much larger future debt or investments.

“I think these are near-term, unfortunate events that if they had the luxury of time and capital they could probably weather but unfortunately with this leverage-based system we have, time is a very expensive luxury,” Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said in reference to the difficulties at Thornburg and Carlyle.

The Dow Jones Industrial soaked up the most damage after it conceded majority of their gains earlier in the week in losing 214.60 points on Thursday’s trading which is a mind-numbing 1.75 percent decrease from the previous day to settle with 12040.39 points. Broader indexes Standard & Poor 500 and NASDAQ composites also experienced declines after S&P 500 lost 29.36 points or 2.20 percent lower to finish at 1,304.34 points while NASDAQ fell 52.31 points a 2.30 percent decrease and end with 2,220.50 points.

Meanwhile, Sweet and Crude Oil maintained above the $105 mark as it closed down at $105.47 a barrel on Thursday in the New York Mercantile Exchange. Earlier in the day, OPEC rejected a US government request to increase production after a surprising decline in US Oil supplies which drove oil prices surging further.

“There are expectations that the dollar will go lower, and that’s driving money into commodities,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “Traders now have this mantra: sell the dollar and buy oil, or buy commodities.”

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