Worries that the U.S. economy may be slipping back into another recession along with continued fears of a possible Greek default, saw the U.S. equity markets experience their worst weekly decline since the fall of 2008. (Although the S&P 500 market have been this low in August already two times) Global investors dumped everything from stocks to corporate bonds to foreign currencies and fled to the safety of U.S. Treasury’s. The Dow, which had plunged over 674 points on Wednesday and Thursday of last week, suffered the sixth largest weekly point drop in its 115-year history. That makes it seven out of the last nine weeks of being in the red. Overseas it was even bloodier, as the 7% global sell off last week has now cut major markets’ price/earnings ratios to near their 2009 lows. Right now, both French and German stocks are already in a bear market, as are the small-stock Russell 2000 index and the Dow Jones Transportation Average. Needless to say, this past week’s sell off dashed hopes that stocks were on the mend following their severe August declines.
Despite the fact that stocks managed to edge slightly higher last Friday, it was no doubt a horrendous week for equities to say the least. The Dow Jones Industrial Average was pummeled to the tune of 6.41%, or more than 700 points, and now rests at the precariously dangerous 10,771 level. The Standard & Poor’s 500 index gave up 6.54% on the week for its second largest weekly decline of the year. It currently sits at the range bound mark of 1,136, although on that bloody Thursday, it did dip through the 1,120 support level. The S&P has now fallen some 16.7% from its peak in April, and the Dow is off some 15.9% from its own April high. Meanwhile, the technology-oriented Nasdaq composite dropped 5.30% for the week, and is now off 13.6% from its spring peak. As we already mentioned above, the Russell 2000 index of smaller-cap stocks is already in a bear market, and finished out the week lower by 8.66%.
Sources:Barron’s, Wall Street Journal, Associated Press, Econoday, Gorilla Trading, Dow Jones & Company, Briefing.com
Audrea attended the University of Alabama in Tuscaloosa, where she majored in one of the first approved financial planning programs taught at the University level. In 1998 Audrea graduated from The University of Alabama in Tuscaloosa with a Bachelor of Science degree in Family Consumer Sciences & Financial Planning. Audrea has over 19 years of experience as a Financial Advisor with Money Management Services. She holds the designations of AIF® (Accredited Investment Fiduciary), CRPS (Chartered Retirement Plan Specialist) & CES™ (Certified Estate and Trust Specialist). As an advisor, Audrea specialized in comprehensive financial planning, estate tax planning, personal taxation planning, retirement income distribution planning, wealth accumulation, personalized portfolio management, and fiduciary investment management services.