Worries about higher unemployment claims & bank failures sent stocks lower. Dow was down 112, decliners ahead of advancers 2-1 & NAZ dropped 22 bringing the 4 day winning streak to an end. Negative news got the better of investors. Dell (DELL) reported earnings after the close. Earnings were lower than expected & their outlook is gloomy to say the least. In after hours trading, the stock was down 4% or 77¢. If that wasn't enough, oil surged to a new record $102.59 a barrel. Some say technical factors are causing the last leg up for oil indicating the up move can not be sustained. True or not, the price increase still hurts.
According to AP, Ben Bernanke, the FED Chair, said:
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Federal Reserve Chairman Ben Bernanke said in testimony to Congress that while large U.S. banks will likely recover from the recent credit crisis, other banks are at risk of failing. Three small U.S. banks have already failed since the summer, when the lending industry started losing billions of dollars as mortgage defaults soared.
"Implying that some banks may fail stirs concerns for any investor who's familiar with financial and economic history," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "Investors have been very edgy about credit market conditions and banks' financial conditions. Very edgy. And this doesn't remove that edginess."
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No wonder stocks sank today.
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