Sources said that yesterday most of the US stocks had dropped after consumer confidence came down. Manufacturing sector also contracted, for the first time after 2005, surprisingly in New York. The energy sector got the worst hit.
A senior investment strategist, Mr Alan Gayle, reportedly admitted that the economy is getting weak and the main concern is the credit issue.
The S&P 500 increased by 1.13 points to 1,349.99 whereas, the Dow Jones Industrial Average came down by 28.77 points or 0.2% to 12,348.21. The Nasdaq Composite Index also lost 10.74, or 0.5%, to 2,321.8. The European stock market, unlike the Asian stock market, witnessed a decreasing trend.
The general economic index of The Fed Bank of New York came down to -11.7 from 9.0 in the previous month. Sources presented at the yesterday's Houston conference hinted that the US government will not annul the chance of recession from their mind. Mr Alan Greenspan, the Former Federal Reserve Chairman said that, US may go for recession as the economic contraction is nearly 50%.
The income of the members of the S&P 500 decreased by almost 15% on an average. The Bloomberg data is saying that companies like, Merrill Lynch & Co and the Citigroup Inc. have dragged their profit down.
Meanwhile Mr Philip Finch, an UBS analyst, has showed a horrible figure of subprime mortgage losses that is worth almost 150 billion dollars. It may increase further by 120 billions for the CDOs and 50 billions for the investment vehicles.
The Dow Jones Wilshire 5000 Index decreased by 3.2 points to 13,652.73 based on which the value of stocks got lowered by 4 billion dollars. Chipotle Mexican Grill Inc. decreased by 3.1 percent to $105.25. Moreover, the Russell 2000 Index declined by 0.5 percent to 701.52.
It seems that the US government will have to face more economic challenges in the coming months which is not a good sign for the Asian market.
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