Stocks fell in Thursday after the assassination of Pakistani opposition leader Benazir Bhutto and after the Commerce Department reported a weak increase in durable goods orders. The Dow Jones industrial average fell more than 100 points.
Bhutto’s assassination raised the possibility of increasing political unrest abroad, always an unsettling prospect for investors. Oil and gold prices rose following the news.
Witnesses said a man fired at Bhutto from close range, quickly followed by an explosion that the government said was caused by a suicide attacker. At least a dozen more people were killed in the attack.
Meanwhile, the government said orders for durable goods — big-ticket items from commercial jetliners to home appliances — rose by just 0.1 percent last month. Economists had been looking for a rise of 2.2 percent. Still, November saw the first rise in durable goods orders in the last four months.
The notion that the economy is slowing was also unnerving for the market.
The Labor Department said the number of workers seeking unemployment benefits showed a surprise increase last week. Applications filed for unemployment insurance rose by a seasonally adjusted 1,000 to 349,000. Economists had expecting the figure would fall to around 340,000 for last week.
In a bright spot, the Conference Board said its Consumer Confidence Index advanced to 88.6 in December from a revised 87.8 in November. It was the first increase since July and Wall Street had expected a slight drop.
Wall Street follows the employment and consumer confidence figures because consumer spending represents about two-thirds of economic activity in the
The data came in a bit softer than people were anticipating and then you throw in the situation in and that’s led people to rush back into Treasury’s. Bond prices rose as investors worried about political instability sought the safety of U.S.-backed investments. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.22 percent from 4.29 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Oil also pushed higher after the Energy Department said in a weekly report that oil inventories fell by 3.3 million barrels last week, more than double the 1.3 million barrel decline analysts surveyed by Dow Jones Newswires had expected.
Stocks have managed to advance for the past four trading days, posting a modest increase Wednesday as investors tried to reconcile their expectations with somewhat disappointing results from retailers.
The battered financial sector again commanded some of Wall Street’s attention following predictions by Goldman Sachs that the flood of write downs at banks will continue.
Source Yahoo Finance