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Saturday, October 31, 2009
Stocks Plummet on Economy Signals
By Sara Lepro
Associated Press
NEW YORK — Grim signals about consumer spending ripped through the markets Friday, sending stocks tumbling as investors raced for safe havens.
The Standard & Poor's 500 index and the Nasdaq composite index ended with losses for October, breaking a streak of seven straight months of gains. The Dow Jones industrial average tumbled 250 points, erasing a 200-point gain Thursday and ending the month flat.
Drops in key barometers of the health of consumers — what they're spending, what they're earning and how they're feeling — fanned worries that an economic recovery celebrated by the market only a day earlier won't last.
The heaviest selling Friday came in areas that have been stalwarts of the market's powerful rally since March: financials, technology, energy and industrials. The safest areas, like health care, consumer staples and utilities, fared better. Investors fled to safer assets like the dollar and Treasurys.
Stocks began skidding after the Labor Department said personal spending fell 0.5 percent in September. The drop was the largest slide in nine months and followed a 1.3 percent jump in August fueled by the government's Cash for Clunkers program.
The government also said that personal income was flat in September compared with the previous month.
The Dow fell 249.85, or 2.5 percent, to 9,712.73, its lowest close since Oct. 5. It was the Dow's biggest one-day percentage drop since July 2 and left the index with a meager gain of 0.005 percent for the month. The broader S&P 500 index fell 29.92, or 2.8 percent, to 1,036.19, its biggest percentage loss since July 2. The Nasdaq dropped 52.44, or 2.5 percent, to 2,045.11.
On the New York Mercantile Exchange, gold prices slipped $9 to $1,037 an ounce; oil prices fell $2.38 to $77.49 a barrel.
Copyright ©2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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