Occupy Wall Street has mobilized many segments of the people including students. In New York thousands gathered to protest tuition hikes, student loan debt and low-wage employment., a photo by Pan-African News Wire File Photos on Flickr.
Dow falls to five-week low as global gloom deepens
November 21, 2011
Los Angeles Times
Investors signaled a lack of faith in markets nearly across the board on Monday as stocks and commodities fell on unrelenting fears about the global economy and financial system.
The Dow Jones industrial average closed with a loss of 248.85 points, or 2.1%, at 11,547.31, nearly a five-week low. The Dow now is back in the red year to date, off 0.3%.
The tone was set at the outset after it appeared that the congressional “super committee” on deficit reduction would fail to reach an agreement by Congress’ Wednesday deadline.
Given Europe’s financial crisis, the super committee’s stalemate was viewed as another sign of governments’ inability or unwillingness to deal with their spiraling debt loads.
“There is just no good news,” said Dave Rovelli, head of equity trading at brokerage Canaccord Adams in New York.
He said some of the selling in stocks stemmed from fear that the U.S. could soon face another downgrade of its bond rating. Shares worldwide plunged in early August after Standard & Poor’s cut the U.S. rating to AA+ from AAA.
Stocks fell sharply in Europe overnight as Spanish government bond yields jumped to new euro-era highs. Voters' decision to throw out the Socialist government failed to make investors feel more confident about holding Spanish debt. The 10-year Spanish bond yield rose to 6.55% from 6.38% on Friday.
Spain's stock market lost 3.5% and French stocks slid 3.4%. The Italian market dropped 4.7% to a seven-week low.
Investors also were unnerved by the German Bundesbank’s new forecast of a sharp slowdown in the German economy in 2012.
Prices of most commodities fell on economic jitters, and as some investors and traders sold what they could to raise cash. Near-term oil futures in New York fell for a third straight day, down 75 cents to $96.92 a barrel. Gold futures slid $46.40 to $1,678.30 an ounce, a four-week low.
Unlike the stock market, oil and gold still are up for the year.
The day’s only real winner: Treasury securities, as some investors stashed cash in something they still believe will repay them in full, despite the lack of a deal to pare the deficit. Treasury bond yields were lower across the board.
“Clients are telling us that preservation of capital is their primary concern,” said Bruce Bittles, chief investment strategist at brokerage Robert W. Baird & Co.