October 15, 2008
The Market for Oil
As the Dow shed 733 points [NY Times link], crude oil dropped to below $ 75 a barrel for the first time since August 2007. MarketWatch link At the close in New York, the Dow Jones industrial average was down 733 points, or 7.8 %, largely erasing Monday’s 936-point gain. The broader Standard & Poor 500 index was down an even greater 9 %. The technology-heavy Nasdaq was down 8.4 percent.
Even though governments are attempting to fix the credit crisis, the stock markets understand that the economic problems on Main Street transcend those of Wall Street. Recession, unemployment, low retail sales, foreclosures, stagnant or falling housing prices, slow housing starts and sales, higher manufacturing costs, and the likelihood that the credit crisis will continue: why would anyone be betting on the economy right now? Not the folks who buy oil futures, for sure.
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