The bears are back
Stocks are falling as the jitters from Thursday’s major sell-off return. At 12:44 p.m. the Russell 2000 (NYSE: IWM) had lost 9.58 points, or 1.21%, to 781.90. The Dow Jones Industrial Average (INDU) was down 98.52 points, or 0.73%, to 13,375.05.
Investors are heading for the exits as worries mount that the era of cheap money, which has fueled corporate takeovers and inflated stock prices, is coming to a halt.
Stocks were trading sideways this morning following news of better-than-expected U.S. economic growth in the second-quarter and even managed small gains after 10 a.m. ET, but by 11 a.m. the positive momentum had lost steam and turned negative.
U.S Treasure Secretary Henry Paulson attempted to calm the mood by appearing on news channel CNBC to say that the problems of the subprime lending sector are contained and that the economy is growing steadily, but that didn’t help.
Elsewhere, the U.S. dollar appreciated and is now worth 0.7327 euros. The greenback closed below 0.728 euros on Thursday.
The price of oil is fast approaching $76 a barrel, up almost $1.
