, IncMay 25, 2010 - Stocks have been falling since last Thursday. The Dow recovered 125.38 points by Friday only to continue declining Monday by loosing 126.82 points (1.2%). Standard & Poor’s 500 lose 13 points (1.2%). The Nasdaq Composite declined to 2213.55 from Friday’s closing at 2229.04.
In Europe, stocks followed the US trend. Stoxx Europe 600 declined by 5.6% to 237.11 from Tuesday’s high of 251.30.
Adversely to the struggling stock market performance, gold maintained its pace. It rose to $1200.00 for a gain of 23.00 (2%) an ounce. Gold watchers believe that it will take more to bring down gold from its lofty perch at the moment.
The stock decline brings news concerns to the mounting deficits in the Euro zone. Art Hogan from Jefferies Group Inc, New York, said: “We are back in uncharted territory. Korea is a major distraction at a time of global uncertainty. The market is selling for a bigger reason. There’s concern about the banking industry in Europe. The Libor rate has spiked, which signifies that credit is slowing in an interbank basis. The market is trying to price in the worst-case scenario, of not only lending freezing, but of a major bank becoming insolvent.”
Investors, though, are hesitant to get back into stocks after experiencing the housing bubble and the 2008-2009 recession that nearly became the Great Depression.
Mickey Cargile of WNB Private Client Service said that “many investors who got out of markets in the huge 200-09 market sell off still haven’t returned and it’s unclear when that might change.”
Cargile added that investors “got out on fear ad without a strategy. Now they need a strategy to get back in and they don’t quite know what to do.”
It is not farfetched to guess that many of these investors may have already placed their money on gold.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
