Stocks Plunge on Service Sector Weakness

[Purveyor]

Source: Associated Press

(02-05) 13:06 PST New York (AP) --

Wall Street plunged Tuesday, sending the Dow Jones industrials hurtling down nearly 370 points after investors investors saw an unexpected contraction in the service sector as evidence that the economy is sinking into recession.

--
The Institute for Supply Management said its January index of the service sector, which accounts for about two-thirds of the economy, dropped below 50, indicating contraction. Economists had been expecting another month of growth; the last time the service sector contracted was in March 2003.

"The report drives a nail into the coffin from investors' minds that we're in a recession," said Todd Salamone, director of trading at Schaeffer's Investment Research. "That doesn't mean stock prices in the months ahead will be lower. But when you see headline numbers like this, there tends to be a reactionary sell."

--
According to preliminary calculations, the Dow fell 370.03, or 2.93 percent, to 12,265.13.

The broader Standard & Poor's 500 index lost 44.14, or 3.20 percent, closing at 1,336.68, while the Nasdaq composite index lost 73.28, or 3.08 percent, to 2,309.57.



Read more: http://www.sfgate.com/flat/archive/2008/02/05/news/archive/2008/02/05/financial/f035511S42.html?tsp=1

[truthisfreedom]

1. Black Tuesday strikes again.

How lovely the rest of the week will be.

[Demeter]

9. And It's Not Even October!

Bush is a whole year ahead of schedule, too.

[ixion]

2. "unexpected", "surprising" ... geez, I guess they must not be paying attention

:eyes:

[Warpy]

4. That's the problem, they're only talking to each other

and the air on Wall Street is increasingly rarefied.

Were they re educated by the peasants every three years or so, just six months at a time, we'd have a vastly different market.

The rate cuts wouldn't have produced a dead cat bounce. The markets would simply correct. They'd likely overcorrect until these stupid, short sighted thieves are out of office and then rise again when the idiotic tax cuts and other stupid policies were reversed.

[Zorra]

3. Aren't low wage service sector jobs primarily responsible for the inflated numbers

on job growth over the past few years?

Yikes!

[Lone_Star_Dem]

5. It was a nosedive day on wall street.

The combination of Fridays job report showing a net loss and the ISM index indicating sector wide decline, have made believers out some previous hold outs that we're in a recession.

[Alcibiades]

10. It seems to me all the previous hold outs are professional touts

I doubt that their own market positions back up their claims. The smart money got out ages ago.

As for the current holdouts--shills, or morans. I hope they lose a bundle. I also hope somebody will call them on this when they return to prognosticating.

[ooglymoogly]

12. The smart money got into the military industrial complex , big oil, big tobacco and big pharma

and out of the rest of the markets that are there only for the fleecing of the unconnected outsiders.

[islandmkl]

6. oh, mort and fred and jim cramer and all the market-pundits

will assure us that this is a sign of a strong economy...you know, the markets can take body blows, hit the canvas, and bounce back EVEN STRONGER. Yeah, just like fuckin' Rocky. "Put your money and faith in the markets, just like we tell you. Us? Oh, we're in gold and cash, but just because we find those commodities interesting at this point in time. No other reason."

[Javaman]

7. I'm soooo glad bendover benenke's rate cuts worked as planned.

:eyes:

short of adrenaline to the heart, this economy is dead.

[ooglymoogly]

8. And when it finlay comes home to them that having been fudging

the no's for the last 7 years they (the GOP) can only fool most of the people some of the time. The market will then find its true level and that won't be a pretty sight. Whoooda thunkit indeed. When the market makes these wild swings that have been happening for the last few months; that in itself is a scary barometer. That is what happened before the 29 crash. The rose colored gin bottle has a crack in it. It is clear at least to me they are trying to run out the clock so that the crash will happen on another watch. By pumping huge amounts of paper into the economy they might have a chance at doing just that, however I believe they have miscalculated on a herculean scale. Forensics later on down the road will find the culprit to be big oil and of course the * gang criminality as part and parcel.

[Karenina]

15. I agree.

[katty]

16. yes, their hair's on fire running out the clock on bush's "watch"

November '08, and the winner of a mountain of debt is....?!!!!

[Alcibiades]

11. But this cannot happen-supply side economics says it cannot be so!

Cut taxes, end the business cycle, perpetual prosperity. Well, the Republicans have been focusing on step one for 20 years. When do stages 2 and 3 come about?

[islandmkl]

13. them right-wingers are a patient lot...

let's see...1980 and Ronald Reagan and 'trickle' down...well hell, it's only been 28 years since that economic experiment, err..sound fiscal policy was most recently instituted to 'save the economy' and 'spur unprecedented economic growth'. Did I miss out on all of that or just stand in the wrong part of the waterfall?

[ooglymoogly]

14. never do because trickle down collapses every time under its own

weight during the first cycle. Paris gowns, 3rd chateaus in the south of france and South American yachts do not a US economy make. The poor and middle class buying school clothes and a burger does.

[aquart]

17. Is this related to the cut cables?

No one able to reach a call center in India?