Stocks plunge on fears about implications of oil slump
Source: AP-Excite
By STEVE ROTHWELL
NEW YORK (AP) After six months of falling oil prices, investors are starting to worry that the prolonged slump is signaling a weaker global economy.
That fear shook financial markets Monday as oil plunged again, dipping below $50 for the first time in more than five years and triggering a big sell-off, not just among energy stocks but across the entire stock market.
Stocks had already endured a weak opening because of concerns that Greece could leave the eurozone, adding to worries about the poor outlook for growth in that region. As oil slid further, the selling accelerated, pushing the Standard & Poor's 500 index to its biggest loss in months.
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QUESTIONS ABOUT RECOVERY
Since the decline began, investors have been working on the assumption that lower oil prices, caused by a glut in supply, will be a boon to the U.S. economy. On Monday, that thesis was discarded as prices plunged further and investors started to fret about the wider implications of the drop.
FULL story at link.
Trader Edward Curran works on the floor of the New York Stock Exchange Monday, Jan. 5, 2015. US stocks opened lower Monday, led by declines in energy stocks as the price of oil plunged again. (AP Photo/Richard Drew)
Read more: http://apnews.excite.com/article/20150105/financial_markets-d4c0c0fb94.html
Turbineguy
(37,317 posts)are reacting to a republican controlled Senate and Congress.
ozone_man
(4,825 posts)For example Caterpillar as explained on NPR. Of course the oil companies like Exxon will suffer, but the overall impact will be wide. Our economy is designed for 2-3% inflation, not deflation, and the huge drop in oil prices is a form of deflation. I think this has more to do with Obama than Bush (remember Bush is an oil man, high prices are good), his sanctions against Russia, his deals with Saudi Arabia, elimination of Libya, the founder of OPEC. Sometimes strategies kind of boomerang and hit you on the head.
Fred Sanders
(23,946 posts)The impact of over 100 billion dollars, annually if prices are at 60 a barrel, being saved by consumers.is a huge net positive more than balancing the loss in oil and energy sector which is less than 2% of GDP.
Not to mention huge savings in the transportation and nap manufacturing industries.
I heard an estimate of a world 1.2 trillion dollar net stimulus to the world economy by this level of energy prices.
fredamae
(4,458 posts)a factor. I believe it Is possible to have a "multi-layered" foundation of cause......
DeSwiss
(27,137 posts)...I wonder what gave it away???
another_liberal
(8,821 posts)Booms always go bust eventually.
DeSwiss
(27,137 posts)...and now it's below $50.
- Genie. Out. Of. Bottle.
While the cries of the ''Allies'' go unheeded.....
Dawson Leery
(19,348 posts)of big monopolistic industries is bad.
another_liberal
(8,821 posts)But will that lesson be learned in time?
WhiteTara
(29,703 posts)in my naivete, that lower oil prices would help the world wide economy, unless of course, the economy is oil. If so, consumers will have a cheap ride into hell.
Response to Omaha Steve (Original post)
IkeRepublican This message was self-deleted by its author.
Kelvin Mace
(17,469 posts)eyeballs deep in oil/gas stocks that are cratering as prices plummet.
GliderGuider
(21,088 posts)That's the sound of peoples' retirement money going poof.
cstanleytech
(26,281 posts)If they set it up as a long term investment they will probably be able to just ride it out as the price will eventually stabilize and then go back up unless some major new discovery happens that can replace oil.
Kelvin Mace
(17,469 posts)we ARE talking about Wall Street banks and hedge funds, right?
Hubert Flottz
(37,726 posts)Market manipulation aimed at wiping out pension funds and 401Ks.
Constructing the next big crash that will rob the poor to give to the 1%.