Related News

Home » Business

Stocks end rough quarter with more questions

THE stock market closed out a painful second quarter yesterday and left investors with heavy losses and far more doubts about the economy than they had just months ago.

Stocks had their worst quarterly performance since the financial crisis. The Standard & Poor's 500 index, considered by many professional investors to be the best measure of the market's health, lost 11.9 percent, while the Dow Jones industrial average lost 10 percent.

Meanwhile, Treasury notes and bonds soared during the quarter, driving interest rates sharply lower, as investors turning away from stocks sought a place where their money would be safe. In the early days of the quarter, the Treasury's 10-year note, used as a benchmark for consumer loans including mortages, was close to 4 percent. By the quarter's end, it had fallen to 2.94 percent.

On the last day of the April-June period, the Dow lost 96 points, and all the big indexes were down about 1 percent.

Investors spent much of the quarter repeating the same questions they had a year earlier: Can the economy continue its recovery? Analysts say the answer most likely is yes but that traders are realizing it won't be easy.

After reaching its highest point since the financial crisis in April, the market began its plunging in May when investors grew fearful that Greece wouldn't make good on debt payments.

Investors who still feel burned by the losses of the financial crisis also seized on mixed economic news as an indication that the rebound was sputtering. Now, investors are trying to determine how the recovery will play out.

Economist Joel Naroff of Naroff Economic Advisors says investors are disappointed the economy is not growing as strongly as they had anticipated earlier this year amid talk of a so-called V-shaped recovery, in which the economy rebounds sharply after its big drop. But he thinks investors have sold too much.

"They're thinking, 'Gee, if we're not getting a V-shaped recovery, we'll get a double dip.' They've gone from euphoria to depression," Naroff says. "The reality is somewhere in between."

The quarter's final day saw a last-hour selloff that has become standard operating procedure, especially when a big economic number, like the government's June employment report due out Friday, is imminent.

Karl Mills, chief Investment Officer at money manager Jurika, Mills & Kiefer, pointed to a lack of buyers in the market that forced sellers to keep lowering their prices to get someone to buy.

"No one wants to be a hero. Everyone is looking to employment numbers coming out Friday," he said.

According to preliminary calculations, the Dow fell 96.28, or 1 percent, to 9,774.02. The Standard & Poor's 500 index fell 10.53, or 1 percent, to 1,030.71, while the Nasdaq composite index fell 25.94, or 1.2 percent, to 2,109.24.

Falling stocks outnumbered those that rose on the New York Stock Exchange by about 2 to 1. Volume came to a light 1.4 billion shares.



 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend