Another volatile day on Wall Street
Published: August 5, 2011 / Author: Kevin Allen
Reports of weak economic growth
in the United States and mounting debt problems in Europe sent stock markets on
another wild ride on Friday.
A day after the Dow Jones Industrial Average lost more than 500 points — its
worst day since 2008 — the index swung up and down in a 400-point range on
Friday before closing up 61 points at 11,445.
The S&P 500 stumbled less than a point to 1,199 and the Nasdaq Composite
fell 24 points to 2,532.
Local experts said Friday that uncertainty in the economy is likely to continue.
The still-fragile U.S. economy is growing too slowly by most measures, they
said, and potential debt crises in Italy and Spain are adding to worries in
The U.S. government reported on Friday that about 117,000 jobs were created in
July and that the unemployment rate inched down to 9.1 percent from 9.2 percent
in June. Those better-than-expected numbers, however, still were too low to
alleviate concerns about another recession.
Investors also were shaken by rumors the U.S. credit rating could be downgraded
from its top-level AAA status.
“You’ve got talk of a recession, talk of a global liquidity crisis and
talk of the credit rating agencies downgrading the U.S. credit rating,”
said Scott Tapley, vice president and portfolio manager at 1st Source Corp.
Investment Advisors. “All of those things are creating a three-pronged
attack on investors’ confidence levels.”
Jeffrey Bergstrand, a finance professor at the University of Notre Dame, said
the U.S. economy is growing at an annual rate of about 2 percent, and that
sluggish pace appears on track to continue for the next year.
“Which means little change in the unemployment rate for the rest of this
year and into next year,” he said.
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Another volatile day on Wall Street.