NEW YORK (AP) -- Stocks plunged Thursday as Wall Street contended with a barrage of bad news: another surge in oil prices and warnings of trouble in the key financial, automotive and high-tech industries. The major indexes showed losses of about 2 percent, including the Dow Jones industrial average, which shed more than 270 points and dropped to its lowest level in nearly two years.
The Dow fell as low as 11,526.70, well under its 2008 trading low of 11,634.82 and to its lowest level since September 2006. That sent some investors rushing for the safety of Treasury bonds - government debt is regarded as a haven when the stock market is in turmoil.
The passel of worries that investors juggled Thursday added up to an increasingly troubled economy. Analysts' negative comments on General Motors Corp. sent shares of the largest U.S. automaker to their lowest level in more than 30 years, while Citigroup Inc. fell sharply after an analyst placed a "sell" rating on the stock and warned investors to expect less from the brokerage sector in an uneasy economic climate. Disappointing outlooks from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors' moods and made the tech sector one of the steepest decliners.
The gloom was compounded by an unnerving forecast about oil prices that raised the specter of higher inflation and even more damage to the economy.
OPEC President Chakib Khelil was quoted as telling a French television station that oil could rise to between $150 and $170 per barrel this summer before pulling back later in the year. That and a falling dollar helped send light, sweet crude up $3.96 to $138.51 a barrel on the New York Mercantile Exchange. Rising oil has saddled nearly all parts of the economy with higher costs, weighing on consumers who now have to reach much deeper into their wallets at the gas pump and therefore have less to spend elsewhere.
Thursday's confluence of bad news overshadowed the National Association of Realtors' report that existing home sales edged up last month, only the second increase in the past 10 months. It also wiped out any positive impact from the Federal Reserve's widely expected decision Wednesday to leave interest rates unchanged.
The stream of downbeat assessments drove home to investors how much U.S. companies stand to be hurt from the fallout of the prolonged housing slump, the nearly year-old credit crisis and the soaring price of oil. The great fear on the Street has been that rising prices and worries about their finances will force consumers to further curb their spending, sending the economy into even more of a decline.
The latest reading on the gross domestic product Thursday backed up that fear. The Commerce Department said the economy as measured by GDP rose at 1 percent annual rate in the first quarter, a slight improvement from the previous estimate of 0.9 percent, but still quite anemic. Moreover, the number does not reflect the impact of higher gas and oil prices that shot up further during the second quarter, which ends Monday.
Read more : indianexpress.com
The Dow fell as low as 11,526.70, well under its 2008 trading low of 11,634.82 and to its lowest level since September 2006. That sent some investors rushing for the safety of Treasury bonds - government debt is regarded as a haven when the stock market is in turmoil.
The passel of worries that investors juggled Thursday added up to an increasingly troubled economy. Analysts' negative comments on General Motors Corp. sent shares of the largest U.S. automaker to their lowest level in more than 30 years, while Citigroup Inc. fell sharply after an analyst placed a "sell" rating on the stock and warned investors to expect less from the brokerage sector in an uneasy economic climate. Disappointing outlooks from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors' moods and made the tech sector one of the steepest decliners.
The gloom was compounded by an unnerving forecast about oil prices that raised the specter of higher inflation and even more damage to the economy.
OPEC President Chakib Khelil was quoted as telling a French television station that oil could rise to between $150 and $170 per barrel this summer before pulling back later in the year. That and a falling dollar helped send light, sweet crude up $3.96 to $138.51 a barrel on the New York Mercantile Exchange. Rising oil has saddled nearly all parts of the economy with higher costs, weighing on consumers who now have to reach much deeper into their wallets at the gas pump and therefore have less to spend elsewhere.
Thursday's confluence of bad news overshadowed the National Association of Realtors' report that existing home sales edged up last month, only the second increase in the past 10 months. It also wiped out any positive impact from the Federal Reserve's widely expected decision Wednesday to leave interest rates unchanged.
The stream of downbeat assessments drove home to investors how much U.S. companies stand to be hurt from the fallout of the prolonged housing slump, the nearly year-old credit crisis and the soaring price of oil. The great fear on the Street has been that rising prices and worries about their finances will force consumers to further curb their spending, sending the economy into even more of a decline.
The latest reading on the gross domestic product Thursday backed up that fear. The Commerce Department said the economy as measured by GDP rose at 1 percent annual rate in the first quarter, a slight improvement from the previous estimate of 0.9 percent, but still quite anemic. Moreover, the number does not reflect the impact of higher gas and oil prices that shot up further during the second quarter, which ends Monday.
Read more : indianexpress.com