Global economic crisis spurs market drop
Key economic indicators released Thursday pointed to more financial gloom as stock markets plummeted on concerns over the European debt crisis and falling confidence in the U.S. and world economies.
After dropping more than 500 points in trading Thursday morning, the Dow Jones industrial average bounced back in the afternoon, ending down 419 points, or 3.7 percent, at 10,991.
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Key economic indicators released Thursday pointed to more financial gloom as stock markets plummeted on concerns over the European debt crisis and falling confidence in the U.S. and world economies.
After dropping more than 500 points in trading Thursday morning, the Dow Jones industrial average bounced back in the afternoon, ending down 419 points, or 3.7 percent, at 10,991.
"It's almost like a worldwide buyers strike," Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, told Bloomberg News. "There's a general malaise on global economic activity."
Other regional and national data released Thursday were:
Some 7,800 Long Island jobs were lost last month compared with July 2010, the third month in a row with year-over-year declines, the state Department of Labor said.
Inflation climbed 3.3 percent in the metropolitan area last month compared with July 2010, according to the federal Bureau of Labor Statistics. Nationally, inflation climbed 3.6 percent.
Shopping activity on Long Island, as measured by sales-tax receipts, climbed less than 1 percent in Nassau and 2.6 percent in Suffolk.
First-time jobless claims last week rose by 9,000 to 408,000 nationwide, more than expected, but a four-week average was at its lowest level since mid-April, the U.S. Labor Department said.
Existing-home sales nationwide fell last month by 3.5 percent to a seasonably adjusted annual rate of 4.67 million homes.
Mortgage rates hit lows not seen since the 1950s, dropping to 4.15 percent, driven down by the Fed's promise last week to keep banks' borrowing rate at zero until 2013.
These numbers and others have sparked concern among some fiscal experts.
William Dudley, president of the Federal Reserve Bank of New York, speaking in New Jersey Thursday repeated his disappointment with U.S. economic growth.
He said 2011 economic activity "has been quite a bit slower than we expected earlier in the year.
"In the last few months conditions in the labor market have deteriorated again and the unemployment rate has edged up," he told the Newark Regional Business Partnership. "Household spending has flattened out, and the housing sector is depressed."
He added, "I have revised down my expectations for the pace of recovery going forward."
Referring to the mixed economic reports and Wall Street gyrations of recent weeks, Dudley said before trading began Thursday, "conditions remain unsettled and the equity market in particular has been quite volatile."
Meanwhile, oil prices fell $5.20 to $82.38 a barrel; the price of gold set another record, rising to $1,830 an ounce; and yields on 10-year Treasury notes finished the day at 2.07 percent after falling as low as 1.98 percent, as worried investors flocked to the security of Treasury bonds despite the record low yields.
Traders started the day with bad economic news, which stoked fears the country is headed for another recession. Stock prices fluctuated throughout the day, but never reached positive territory.
By the close, investments had shed more than $600 billion in market value, Bloomberg News reported.
The broader Standard & Poor's 500 index fell 4.5 percent, or 53 points, ending the day at 1,140.
The Nasdaq composite index lost 5.2 percent of its value, falling 131 points to end the day at 2,380. Markets in Asia and Europe were also sharply down.
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