Stocks Drop Sharply on U.S., Global Economic Worries
The major financial indices retreated into negative territory for the year Wednesday as a weaker outlook from the Federal Reserve and reports of a slowdown in factory output in China softened investor expectations. Among major world exchanges, only the Shanghai market gained for the day.
Adding a little impetus to the slide was a report that the nation’s trade deficit widened noticeably in June, dropping 18.8% to $49.9 billion compared to $42 billion in May. It is the largest trade gap since October 2008.
For the day, all major U.S. indices were down (see figures below).
|8/11/10 Close||8/10/10 Close||Change||Gain/Loss|
Investors were reacting to the latest Fed comments that highlighted worries about the rate of continued growth in the United States. The news from China, it was feared, could foreshadow a slowdown in global business and job growth.
Until Wednesday, the market had been relatively flat in August following a generally steady gain through July.
As I’ve noted before, market volatility is a continuing fact of life, but market corrections offer good opportunities to re-enter the market. I’ll be happy to review your portfolio in the light of current market trends if you wish. Just give me a call.
Randy Carver RJFS Registered Principal
Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks.