Dow Jones Industrial Average: bleak days of the fall

Dow Jones Industrial Average is hell-bound to decline

In brief: New worries among investors bring further problems for the Dow Jones Industrial Average. The stock market opened on a negative for the U.S. Dow Jones Industrial Average.

The problems of the world economy touched Dow Jones Industrial. Most of the news that came today from all over the world have been very negative. Dow Jones Industrial Average starts to decline from the first minutes of trading on the background of the overall negative trend. As usual, the main negative factor for Dow Jones became news from China. The first day of June brought new concern and anxiety for investors. As often happens in such cases, the negative news did not come alone.

The first negative signal sounded in the beginning of the day from China. The index of purchasing managers (PMI) fell in May to 53.9 points after 55.7 units in April. In parallel, the same index, calculated by different methods of bank HSBC, uzhalsya to 52.7 points after 55.2 in April. This gave rise analysts and observers of the Chinese miracle to talk about a marked deceleration of economic locomotive, which resulted in approximately a one percent decrease in the value of the index of Shanghai Stock Exchange. Later it became known that the previously agreed deal to sell the Asia-Pacific unit affected by the crisis in the U.S. insurance group AIG for $ 35.5 billion on the verge of collapse, as Chinese buyers have lowered the bid price to $ 30 billion

Against the background of the failure of another attempt to clog the gushing oil wells at the bottom of the Gulf of Mexico, BP quotes on the London Stock Exchange opened today after a long weekend, fell immediately by 14%, licked additional 13.1 billion pounds ($ 19 billion), with and without the thinner a quarter of the capitalization of the company. However, engineers BP was offered another option to curb the raging wells, consisting of immersion in her mouth vodootdelitelnoy new pipe through which oil flowing in the system of flexible hoses will be pumped into the hold of the item on the surface of the Gulf tanker. Will the new plan is difficult to say, because such work at a depth of a mile had never been conducted. The most reliable step to halt the discharge of oil through an emergency drill hole will be well inclined to the underground deposits, the yield of oil which will significantly reduce the pressure in the damaged line and to allow and block it permanently. However, the drilling of another stem will take on an estimated no less than two months, while every day an uncontrolled spill brought new suffering to the people of coastal areas and causing irreparable damage to the environment. Whatever it was, but CEO Tony Hayward, BP (Tony Heyward) in its latest statement expressed the belief that the use of different technological solutions will reduce the time to fully address the problem. In this regard, I would have already started to buy the paper carefully hidebound oil monster. Of course, the consequences of the disaster still some time will put pressure on the quotes, but hardly an accident, even a regional scale would crush one of the oldest and largest oil companies in the world. Added fuel to the fire devouring quotes index and the ECB, whose representatives said last night about future losses for commercial banks in the eurozone over the next eighteen months in the amount of 195 billion euros ($ 239 billion) in write-offs of bad loans. After such a gloomy forecast rate of the single European currency has updated a minimum of four years in the confrontation with the U.S. dollar, having fallen in the moment to the ratio $ 1.2110. At the moment Russian stock indexes lost around 3% of the cost, European exchanges are retreating at an average of 2%, while futures on the U.S. DJIA and S & P500 lose weight by about 1,5%. The cost of most companies in the world’s stock markets are attractive enough for opening long positions. The fundamentally important point here is the level of support for the “broad” S & P500 index at around 1,048 points.

Pavel Migin
2010-06-01 15:27, Economics.

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