Stocks Fall On Retail Sales News in May 2010 – Recession in Making?

An article by Punit    No Comments

After a drop in retail and financial shares, the stock market suffered a hit and fell again; coming just one week after one of the biggest falls the Dow Jones has ever seen. This worries some investors because of the possibility that the market may be going down after going up and recovering for so long. Many experts are stressing that this is only a blip on an otherwise good trend for the stock market.

The stock market slid in the later-half of the week due to worries from investors about the state of the retail and financial sectors. One big reason was the disappointing forecast from Kohl’s, as well as criminal investigations going on for many financial institutions.

The Dow Jones fell by 114 points after it had gone up 149 points the previous day. This was the sixth fall for the Dow Jones in only the past eight days. Things did look good for the Dow Jones for part of the week but upon greater worries about the weakening of the Euro, the market dipped as traders became worried about the direction the stock market was moving in.

Kohl’s Corporation saw its share price fall by 5.8 percent, which then dragged down other consumer stocks as many experts and investors began to worry about the state of other consumer stocks.

In addition, the Attorney General of New York is looking at eight banks to see if they misled rating agencies about mortgage securities. This brought down several bank stocks. As well, tech industry shares fell as the forecast from Cisco Systems Inc. looked extremely poor. Their stock fell by 4.5 percent, making it the steepest drop among stocks on the Dow Jones.

Gold had also set a record high this week but fell the following day. Crude oil went down by $1.25 to $75.40 per barrel on the New York Mercantile Exchange.

The Euro fell as well, reaching a 14-month low as Greece and Spain were saddled with deep debt and had to cut spending.

Lastly, there was more bad news from the Labor Department as jobless claims fell to 444,000 from 448,000 the previous week. This may seem good but most economists had thought it would go down to 440,000. The unemployment rate also went up to 9.9 percent while employers added 290,000 jobs.

The stock market took a bit of a slide after the big slide of the previous week. Many experts are worrying that this may become a sign of bad things to come down the road, but others feel that it is just a blip in the world of investing. Next week will be a good indication of whether or not the stock market is going to continue to slip in value. If things reverse, it should happen next week but only time will tell.

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