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By Jennifer Yousfi
Stocks were lower today (Monday), while prices for gold and oil soared to record highs.
At midday today – after a rocky morning of up and down swings – the three key U.S. stock indices had posted slight losses.
The Dow – the bellwether of U.S. blue chips – slumped 46.40 points (-0.38%), to trade at 12,219.99. The tech-laden Nasdaq Composite Index dipped, as it shed 11.87 points (-0.52%), to reach 2,259.61. And the broader Standard & Poor's 500 Index slipped 2.61 points (-0.20%), to trade at 1,328.02.
"We know the economy is sluggish whether it's growing modestly or it's falling modestly," Peter Boockvar, equity strategist at Miller Tabak & Co. LLC, told MarketWatch. "It seems the only question is, how long does this last and how deep does this contraction get?"
The basic materials sector and energy sector had slight gains, up 0.57% and 0.15%, respectively. The financial sector, down 0.93%, and the technology sector, down 0.77%, posted the biggest declines.
Oil hit a new record of $103.95 for April delivery. Gold also crossed a new threshold as it traded at $992 an ounce, also for April delivery.
"The Fed rate cuts are making things worse because they're doing nothing to help what is ailing this economy. They're debasing the value of the U.S. currency and they are causing inflation to continue to skyrocket," said Boockvar.
The Institute for Supply Management announced today that its factory index slipped in February to 48.3 from 50.7 in January, crossing the official 50-point dividing line that signals a contraction.
"The evidence is piling up that the economy is slipping into at least a mild recession," Scott Anderson, a senior economist at Wells Fargo & Co. (WFC) in Minneapolis, who forecast the index would drop to 48, told Bloomberg News. "With the much higher food and energy prices and restricted credit, there are not a lot of avenues for consumers to continue to spend."
Worries about the U.S. economy and the market losses from Friday spilled over into the overseas markets. Japan's Nikkei Index plunged 7% – with a 610.84-point decline – to reach 12,992.18 as a strong yen continued to hurt exporters. Hong Kong's blue-chip Hang Seng Index dropped 746.70 points to close at 23,584.97.
At midday, the dollar had lost ground against the euro [down 0.092%] and the yen [down 0.996%], but gained against the pound sterling [up 0.212%].
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