DOW 5000 – S & P to 500 – Will Dow Hit 5000 Before Easter



Dow 5000?

Just how low can stocks go?

Despite Friday’s small gain, the Dow Jones Industrial Average marked its fourth consecutive week of losses as it tumbled through the 7000-point mark and spiraled to new 12-year lows. The Standard & Poor’s 500-stock index is trading below 700 for the first time since 1996.

As earnings estimates are ratcheted down and hopes for a quick economic fix fade, the once-inconceivable notion of returning to Dow 5000 or S&P 500 at 500 looks a little less far-fetched.

A decline to 500 on the S&P is 183.38 points and 27% away. The index already has …

Futures Signal More Stock Losses


Futures activity suggested that stocks would slide at the open on Monday after four straight weeks of losses that have pushed major market indexes to 12-year lows.

About 15 minutes before the start of trading in New York, futures on the Dow Jones Industrial Average were lower by about 132 points. S&P 50 futures were down by more than 13 points; Nasdaq futures were down more than 15 points. Changes in futures don’t always accurately predict early market moves after the opening bell.

The pressure on U.S. futures came amid another cascade of selling in markets overseas. In Asia, Japan’s Nikkei 225 dropped 1.2% to a 26-year low after data showed that the highly export-dependent nation ran a current-account deficit in January, its first in 13 years. Banking stocks also fell, with Shinsei Bank sliding by nearly 9%. The Nikkei is at less than a fifth of its all-time high of 38915.87. Stocks in China and Hong Kong also fell. The Shanghai Composite slid 3.6%.

Markets in Europe were also weaker. The FTSE 100 was down 1.5% after the British government’s confirmation that it was taking a majority stake in Lloyds Banking Group in exchange for its insuring potentially more than $367 billion of shaky assets. U.S. shares of Lloyds were down more than 9%. The shares of HSBC Holdings, another troubled British bank, were down 11%.

Observers continued to express concern about the global economic outlook. Warren Buffett said in an interview on CNBC television that the economy has “fallen off a cliff.” The World Bank said the global economy is likely to shrink for the first time since World War II. Global industrial production by mid-2009 could be as much as 15% lower than 2008 levels, it said.

Bank woes to hit Wall Street

“What’s dragging global markets across the board, it’s financials. We’re concerned about HSBC, Lloyds is getting hit, and AIG came out and warned its failure will cripple world banks,” said Art Hogan, chief market analyst at Jefferies & Co in Boston. “If you look at everything that’s been done so far, there’s been a lack of detail.”

S&P 500 futures fell 10.30 points and were below fair value, a formula to evaluate pricing taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures slid 121 points, and Nasdaq 100 futures shed 14.50 points.

In an interview on CNBC television, billionaire investor Warren Buffett said the current environment was an “economic Pearl Harbor”

World stocks spiral lower on fresh financial woes

LONDON (AFP) – World stock markets fell sharply Monday as banking and economic woes returned to haunt investors, with Tokyo tumbling to a fresh 26-year low and London striking six-year depths.

European equities plunged, with London reeling after the British government took a majority stake in Lloyds Banking Group (LBG) over the weekend in a deal to insure its toxic assets.

The British capital’s FTSE 100 leading shares index slumped to 3,487.13 points in early deals, marking the lowest point since March 14, 2003. It later recovered slightly to 3,492.97 points, down 1.07 percent from Friday.

Elsewhere, Frankfurt’s DAX shed 1.35 percent in value and in Paris the CAC 40 was down 1.77 percent.

Most Asian markets sank after news of Japan‘s first current account deficit in more than a decade. Tokyo’s Nikkei-225 index shed 1.21 percent to end at 7,086.03, the lowest close since October 6, 1982.

Hong Kong stocks dived 4.8 percent as shares in banking giant HSBC dropped dramatically, with investors spooked by the group’s US exposure and plans to raise fresh capital, dealers said.

“The FTSE 100 fell … as the banking sector continued to weigh,” said Joshua Raymond, market strategist at spread-betting firm City Index.

“We saw HSBC fall in Asia … and concerns regarding their exposure to US toxic debts are likely to weigh for some time.”

McAuleys World – Stop treating the symptoms and treat the problems.

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