US Stock Market Suffers Biggest Loss Of 2009 On Poor Retail Sales

Markets suffered a heavy setback today (Wednesday) as all of the major averages suffered their worst losses of the year.  The Dow Jones Industrial Average (^DJI) dropped -2.94% to close at 8,200.14 while the Nasdaq (^IXIC) and S&P 500 (^GSPC) dropped -3.67% and -3.35% respectively landing at 1,489.64 and 842.62.  New data released on retail sales seemed to be the culprit for today’s large drop.  This month retail sales fell -2.7%, marking the sixth month in a row that this metric has shown a loss.  After Wal-mart’s (WMT) poor earnings report it seems as if the rest of the retail market may be soon to follow.  Many investors are expecting the worst during this earnings seasons, and this has been reflected by the market over the last few trading days.

In other news, Apple (AAPL) has announced that CEO Steve Jobs will take a medical leave of absence until at least the end of June this year.  Investors have been speculating about Jobs’ health for many years and Jobs has repeatedly denied any problems until he recently admitted to having a hormone deficiency that has caused him to lose an excessive amount of weight.  It seems that investors over the years have believed that Jobs was a driving force behind Apple’s great success over his tenure at the firm.

Oil inventories were up again this week sending energy commodities and equities spiraling downward right from the start of the session.  Crude oil fell half a dollar today and closed at $37.28 while the S&P 500 Energy Composite (^GSPE) fell over 4%.  Energy and financials were the largest drag on the index, and it seems very unlikely that the market can have any substantial recovery unless there is a reversal in both of these sectors.

President-Elect Barack Obama called his  Treasury Secretary to be, Timothy Geithner an “embarrassment” today referring to his $34,000 in unpaid taxes.  Geithner has appeared in front of the Senate over the last few days for questioning before his appointment was finalized.  Geithner is the current head of the New York Federal Reserve Bank and has had substantial experience dealing with this financial crisis right in the heart of the storm.  The original plan was to have Geithner appointed before Obama’s inauguration day, but this may not longer be possible if these hearings are held up due to Geithner’s past tax situation.

In side news, the prosecution lawyers are attempting for a third time to jail the $50 billion dollar ponzi scheme architect Bernard Madoff.  The first two attempts were unsuccessful because the judge questioned why the prosecution had agreed to the initial bail agreement and was very hasty to change their minds.

Disclosure: The mutual fund the author manages is long WMT.

Subscribe by RSS Subscribe by Email