Investors used Thursday's hat trick of grim economic news to take some of the profits made over the last four days off the table. Fresh reports showed that new-home sales fell to their slowest pace on record, spending on durable goods (those designed to last three years or more) continued to plunge, and that jobless claims rose to a new record above the levels seen towards the end of the '82 recession.
"The three reports painted a picture of an economy showing no signs of a turnaround and also indicated that credit losses will worsen as more borrowers fall behind on their payments," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "The IMF yesterday upped its assessment of U.S. credit losses to $2.2 trillion and economist Nouriel Roubini revised his estimate of eventual losses to $3.6 trillion."
President Barack Obama castigated Wall Street bankers who were paid huge bonuses, calling the payments "shameful" at a time when the American public is dealing with economic hardship. The president reacted harshly Thursday to reports that corporate employees got paid more than $18 billion in bonuses last year, saying there were "the height of irresponsibility."
At the close of floor trading on the NYSE, the DOW was on 8149.01 after falling 226.44 points (-2.7%) while the S&P wiped out Wednesday's gain, finished on 845.14 after declining 28.95 points (-3.31%). The tech-heavy NASDAQ closed on 1507.84 after losing 50.50 points (-3.24%). Bonds were sold even as stocks declined after the Fed indicated in yesterday's statement that it would not yet purchase Treasuries. The yield on the 2-year note rose 13.9 basis points to 0.950% while yield on the benchmark 10-year note gained 20.4 basis points to 2.867%. The dollar traded mixed on the day, gaining 0.14% on the euro and 2.04% against Australia's currency while it fell 0.39% to the yen and 0.34% against the pound.
Crude oil for March delivery was recently trading down 61 cents (-1.42%) to $41.56 per barrel.
Gold for February delivery broke $900 on the day, trading up $19.80 (2.23%) to $908.0 per ounce.
Crude oil for March delivery was recently trading down 61 cents (-1.42%) to $41.56 per barrel.
Gold for February delivery broke $900 on the day, trading up $19.80 (2.23%) to $908.0 per ounce.