Wednesday, 31 August 2011

Gross Says U.S., Europe Face Recession

Gross Says U.S., Europe Face Recession

Thursday, 4 August 2011

Wall Street: The longest down stretch for stocks since October 2008

From The

Fear is gripping the market place. Though the US government avoided a debt default, investors are worried that growth is slowing down across the world. Yesterday, the Commerce Department reported that consumers cut their spending in June for the first time in nearly two years. Analysts had predicted a slight increase. The report comes a day after a weak manufacturing report and last Friday’s report that the economy grew at its slowest pace in the first half of the year since the recession ended in June 2009.

As a result, stocks closed down yesterday for the eighth day in a row. That hasn’t happened since the bout of declines ending on October 10, 2008.

As of Tuesday, the Dow Jones Industrial Average is below 12,000 and it has lost almost 900 points, or 7% in just eight days. The S&P 500 has dropped about 90 points, or 6.8%, and closed at its lowest levels for 2011.

Investors are fleeing out of stocks and into safe haven investments. Yesterday, gold rallied to all time highs of $1,660 and silver moved up to $40.80. Treasuries surged, driving 10 and 30 year yields to the lowest levels seen in 2011.

Investors have also been buying the Japanese yen and the Swiss Franc. Typically people buy the yen as a haven for their cash because Japan’s current-account surplus reduces the country’s dependence on borrowing abroad. As for the rally in the Swiss Franc, investors are attracted to Switzerland’s lack of credit problems.