WORLD> America
|
WORLD> America
|
|
Rush of US economic data likely to shape week
(Agencies)
Updated: 2008-11-03 10:08 It was fears about banks' troubles with bad mortgage debt and weakness in the overall economy that left October as the worst month on Wall Street in 21 years.
The Dow Jones industrial average fell 14.1 percent and the broader Standard & Poor's 500 index lost 16.9 percent as the panic over a now-easing freeze in credit markets shifted to fears of an acute recession. The damage in October would have been far worse, however, if it weren't for last week's surges of 11.3 percent in the Dow and 10.5 percent in the S&P 500. That was a marked reversal from the second week of October when stocks plunged 15.3 percent, at the time accounting for 40 percent of the market's losses for the year. Investors are hoping the Dow can continue to trade above its Oct. 10 close of 8,451.19, its lowest finish since April 2003. Similarly, the S&P 500 recorded a low on Oct. 10 of 899.22. The market has since remained above those levels, giving some observers hope that a market bottom is in place. But even with the partial snapback last month, it's impossible to know whether the market, down 38 percent from its October 2007 peak, has adequately priced in the effects of a tough economy. Georges Ugeux, chairman and chief executive of Galileo Global Advisors, contends troubled debt from credit cards, for example, could emerge as a heightened worry for Wall Street as the economy slows. He said that while the money being deployed by governments around the world to stabilize banks provides a big safety net, some of the market's biggest professional risk-takers, hedge funds, could still unnerve the markets if they're forced out of business or into more of the heavy selling that occurred in October. "I think in the coming weeks what we are going to see is something that will look like a bloodbath in the hedge funds," said Ugeux. |
