Wall Street wraps up 2007 in a sombre mood
NEW York - Wall Street ended a painful year with another steep loss Monday as investors glumly anticipated that 2008 would see a continuation of the uncertainty and turbulence of 2007. The Dow J ones industrials fell about 100 points - the latest in a string of triple-digit moves that became commonplace in thejust-ended year, although they still managed to finish 2007 with a respectable increase of more than 6 percent - not as large as the 16.29 percent increase in 2006, but a better performance than the modest loss in 2005.
The Dow's annual gain came even after it posted its worst fourth-quarter drop in 20 years, as investors battled with billion-dollar losses at the world's biggest banks and cooler spending by consumers, whose budgets have been crimped by record-high oil prices and falling home prices. "Considering all that's going on, the market really acted pretty well," said Todd Leone, managing director of equity trading at Cowen & Co. It's tough to saywhat the primary market driver of 2008 will be, but he said the fourth-quarter earnings season in January should shed some light on how US companies are surviving the recent slowdown and credit crunch.
On Monday, the National Association of Realtors said November existing home sales rose 0.4 percent to an annual rate of 5 million - the first rise in nine months. However, sales are still 20 percent below where they were a year ago, and the median existing home price has dropped 3.3 percent over the past 12 months. Falling home prices last year have made it hard for struggling homeowners to refinance their mortgages, and the slump in construction activity has hurt homebuilders and other housing-related industries.
Investors have some reason to believe that Wall Street in 2008 might be able to put to rest some of its financial troubles. The UK's Observer newspaper reported Sundaythat Merri11 Lynch & Co. was in talks over the weekend to line up capital from investors in China and the Middle East in exchange for portions of the Wall Street firm. Merrill, like many other financial houses, has seen its portfolio lose billions of dollar in value due to misplaced bets on mortgages.
And as Citigroup, UBS, Morgan Stanley and Bear Steams have done, it has turned to investors in Asia for much-needed capital - Merrill has already gotten $4.4 billion last month from a Singapore fund, which bought a 9.9 percent stake in the US brokerage. According to preliminary calculations, the Dow fell 101.05, or 0.76 percent, to 13264.82. The blue-chip index remains below its Oct. 9 record high of 14 164.53, at which point it was up more than 13 percent yearto- date.
Broader stock indicators also declined, but finished the year higher. The Standard & Poor's 500 index fell 10.13, or 0.69 percent, to 1 468.36, to end 2007 with a gain of more than 3 percent. It had reached a record close of 1565.15 on October 9. The technology-dominated Nasdaq composite index fell 22.18, or 0.83 percent, to 2 652.28, to finish the year with a nearly 10 percent gain. It was the best performance for the Nasdaq, still well below its tech boom highs, since 2003.
The Dow's annual gain came even after it posted its worst fourth-quarter drop in 20 years, as investors battled with billion-dollar losses at the world's biggest banks and cooler spending by consumers, whose budgets have been crimped by record-high oil prices and falling home prices. "Considering all that's going on, the market really acted pretty well," said Todd Leone, managing director of equity trading at Cowen & Co. It's tough to saywhat the primary market driver of 2008 will be, but he said the fourth-quarter earnings season in January should shed some light on how US companies are surviving the recent slowdown and credit crunch.
On Monday, the National Association of Realtors said November existing home sales rose 0.4 percent to an annual rate of 5 million - the first rise in nine months. However, sales are still 20 percent below where they were a year ago, and the median existing home price has dropped 3.3 percent over the past 12 months. Falling home prices last year have made it hard for struggling homeowners to refinance their mortgages, and the slump in construction activity has hurt homebuilders and other housing-related industries.
Investors have some reason to believe that Wall Street in 2008 might be able to put to rest some of its financial troubles. The UK's Observer newspaper reported Sundaythat Merri11 Lynch & Co. was in talks over the weekend to line up capital from investors in China and the Middle East in exchange for portions of the Wall Street firm. Merrill, like many other financial houses, has seen its portfolio lose billions of dollar in value due to misplaced bets on mortgages.
And as Citigroup, UBS, Morgan Stanley and Bear Steams have done, it has turned to investors in Asia for much-needed capital - Merrill has already gotten $4.4 billion last month from a Singapore fund, which bought a 9.9 percent stake in the US brokerage. According to preliminary calculations, the Dow fell 101.05, or 0.76 percent, to 13264.82. The blue-chip index remains below its Oct. 9 record high of 14 164.53, at which point it was up more than 13 percent yearto- date.
Broader stock indicators also declined, but finished the year higher. The Standard & Poor's 500 index fell 10.13, or 0.69 percent, to 1 468.36, to end 2007 with a gain of more than 3 percent. It had reached a record close of 1565.15 on October 9. The technology-dominated Nasdaq composite index fell 22.18, or 0.83 percent, to 2 652.28, to finish the year with a nearly 10 percent gain. It was the best performance for the Nasdaq, still well below its tech boom highs, since 2003.
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