CHICAGO (CBS) — Wall Street is hoping to avoid another market meltdown Friday, after fears about the health of the U.S. economy sent stocks plunging.
As CBS 2’s Vince Gerasole reports, when the dust settled Thursday, the Dow Jones Industrials had dropped 419 points, the NASDAQ lost 131, and the S&P 500 index shared 53 points.
Futures on the Chicago Mercantile Exchange were also trading downward.
Overall, these have been some dismal days in the financial world, some of the worst we’ve seen since October of 2008. Investors are bracing for another wild ride on Wall Street today, and all of this is fueling fears of a double-dip recession.
On the heels of another gut wrenching downward spiral on Wall Street, there are now even stronger concerns about the health of both the U.S. and Global economies. The latest indicators are providing no bright spots.
“Weekly jobless claims back over 400,000, weak manufacturing for the mid-Atlantic region, a 3.5 perecnt drop in existing homes – add that to the Morgan Stanley warning that the U.S. and Europe are dangerously close to a recession,” said Jill Schlessinger of CBS MoneyWatch.
Even the most optimistic forecasters are calling for no more than slow 1 to 2 percent economic growth in the months ahead, which isn’t enough to create desperately needed jobs.
“People are scared,” said Neel Kashkari, managing director of PIMCO. “When people are scared they save more they spend less corporations invest less they retrench and that can become a self fulfilling prophecy.”
It seems no market is immune from the economic weakening. In South Korea, stocks fell 6 percent. London is reeling after leading shares lost $100 billion in just one day, and European banks are taking the biggest hammering, plagued by continuing fears that Italy and Spain may not be able to pay back the huge debts they owe.
European traders say it’s crucial that governments start finding real was to solve the debt crisis.
“I guess it makes no sense for financial markets just to have talking politicians,” said Robert Halver of Baader Bank AG. ‘We need to have more long-lasting solutions –sustainable solutions – and still, we don’t find any of them.”
Also adding insult to injury, Bank of America is cutting 3,500 jobs this quarter as it restructures, and could cut as many as ten thousand positions in the months ahead.
If there are any bright spots out there, gold has risen to another all time high, and mortgage rates are at record lows, making home refinancing and lower monthly payments a possible way to ease you thorough these tough times.