U.S. Stocks Drop for Third Week as Recession Speculation Builds

[marmar]

from Bloomberg:



U.S. Stocks Drop for Third Week as Recession Speculation Builds

By Elizabeth Stanton

Jan. 12 (Bloomberg) -- U.S. stocks fell for a third straight week, the longest streak since August, after forecasts from AT&T Inc., American Express Co. and Tiffany & Co. bolstered speculation that the six-year economic expansion is ending.

AT&T dropped the most since 2003 on the New York Stock Exchange after saying customer demand weakened. American Express had the steepest loss since September 2001 after adopting a ``cautious view'' for the year. Tiffany tumbled the most in 5 1/2 years on slower holiday sales. Goldman Sachs Group Inc. economists said the U.S. may already be in a recession, joining counterparts at Morgan Stanley and Merrill Lynch & Co.

The Standard & Poor's 500 Index fell 0.8 percent to 1,401.02 this week, bringing its year-to-date loss to 4.6 percent for the worst start since 1982, according to Bloomberg data. The measure fell to an almost 10-month low on Jan. 8. The Dow Jones Industrial Average sank 1.5 percent to 12,606.30. The Nasdaq Composite Index declined 2.6 percent to 2,439.94.

``We certainly have another couple of months to go before we see the bottom of this thing,'' said Richard Weiss, who helps manage about $60 billion as chief investment officer at City National Bank in Beverly Hills, California. ``The duration of the downturn is still unknown.''

AT&T fell 6.6 percent to $38.20 this week for the third- largest decline in the Dow average behind American Express and Alcoa Inc. Chief Executive Officer Randall Stephenson said slowing economic growth led to ``softness'' in the home-phone and Internet businesses. .....(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aUMCsasxI.3o&refer=home

[tsuki]

1. The value of my simple IRA fell 30% in December. Let's hear

it for privatization of Social Security. A return to the days of yester-year when the major killer of old people was exposure and mal-nutrition.

I guess I had better add :sarcasm:

[CrispyQ]

2. One of my many bumper stickers:

Republican Social Security:
"You want fries with that?"

[tsuki]

4. LOL. Love it. nt

[Didereaux]

3. I love it. Speculation of that which already exists! gotta love those economic folks

[INdemo]

6. To see how this Repuke administration has manipulated the economic

reports since 2000,it's a given that the real economic numbers would suddenly come to light during this election year.....And one could bet that the Repukes will use the economy as a main issue going back to their nearly 75 year strategy that "Democrats will tax and spend".....I could go on and on about this but working class Americans have been able to see through the smoke screen for 7 years and see the true economic picture..So the news of a recession during this election year comes as no surprise.

[DFW]

5. The price of gold touched $900 an once on Friday, a world record

When Clinton left office, the price of gold was under $300.

The price of gold is more a barometer of economic security
than anything else. You can't eat it, you can't live in it,
you can't ride it anywhere, and it pays no interest. Industrial
use has not risen appreciably, although the rise in the economic
fortunes of India and China could change that soon. Those two
countries have traditionally valued gold as a store of wealth,
and are awash in ever-depreciating dollars.

A Swiss colleague who recently retired from their largest bank
recently told me that people just want "out of the dollar." This
is the explanation for the wild ride upward in the price of gold.
As long as people can get rid of their dollars for gold, they will,
and never mind that at the end of the day, it is a lump of metal.
You can never eat it, and it will never heat your home in the winter.
If people want it, it is because they think it will protect them
against the weakness of another asset they hold, and right now, that
is the American Dollar.

A significant long-term drop in the price of gold will indicate a
rekindling of confidence in the dollar (not necessarily linked, but
a decent indicator). Unfortunately, most money managers see it rising
to $1000 an ounce. I usually disagree with them on this, as the rational
side of me just can't see the benefit of having bars of metal in the
safe as an investment hedge for the future. But Cheneybush's spending
my grandchildren's income on Iraq has overruled logic. China, India and
Europe now hold more dollars than we can possibly redeem, and they know it.

We rae definitely headed for scary times, and my greatest fear is that
Cheneybush has stuck us so far down a black hole that not even a Robert
Rubin can pull us back out this time.