Weak economic data sent stocks sharply lower. Dow is down 146, decliners ahead of advancers 2-1 & NAZ is down 32. The culprits are the same, economic data showing a slow if not recession economy. Construction spending declined in Apr as home building continued its multi year slide. The Commerce Dept reported that construction fell 0.4% in Apr after a 0.6% in the prior month. Meanwhile a key index showed an unexpected increase in May, the Institute for Supply Management's index of manufacturing activity edged up to 49.6 in May compared to an April reading of 48.6. However even with the increase, the index remained just below 50, the dividing line which indicates whether manufacturing is in a recession. Oil continues to hang around 127-8 while gas prices at the pump are just under $4 (check the AAA button in the blog's right column for yesterday's numbers).
Financials, i.e. banks, are taking a beating today after Wachovia (WB), down 67¢, announced the chairman who gave them a whopper loss last year is out. WB made the mistake of buying a big California mortgage business a few months before the bottom fell out of that market. He admitted in their annual, that the timing was not good. As with other banks, Bank of America (BAC), a Dow stock, is down 50¢, to the lowest price in over 6 years. These are rough times for banks following gloomy US economy news.
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