The Dow Jones fell for the fourth straight day on Monday as the index fell 125.21 points (-1.46%). The Nasdaq also fell 32.80 points (-2.09%). Commonly known to be an economic indicator, oil fell 8 percent to a new low for 2009. This extended sell-off in the market combined with the drop in oil prices shows that investors are not too optimistic about the state of the economy, and that they believe demand for oil will continue to decrease.
Alcoa (AA), an aluminum company, was the first company to come out with its 4th quarter earnings. The company, which released its quarterly earnings soon after the markets closed, announced that it lost $1.19 billion during the 4th quarter due to plummeting aluminum demand in the U.S. and across the world.
Obama also asked for the remaining $350 billion of the bailout funds to go to homeowners and small businesses. This announcement of Obama’s plans led financial stocks to decline as well on Monday, as it seems like they no longer have the safety net of government bailout money to back them up if they go bankrupt or get into other kinds of financial trouble.
Investors are still bracing for the rest of 4th quarter company earnings to come out in the upcoming days and weeks. It could, and probably will, get much uglier on Wall Street before things start to look up. Companies have constantly warned that they have been hit hard by the recession, and the market will react negatively to their 4th quarter earnings if they truly are as bad, or worse, as most companies are claiming them to be.
I am staying out for the time being, but I am keeping my eyes out for any signs of good news.
Stay updated,
Niki Pezeshki
College Trillionaire
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