The Dow Jones Industrial Average, fueled by higher-than-expected unemployment claims and the Federal Reserve reporting lower economic growth and higher inflation, was down by more than 200 points in early trading Thursday before fighting back a bit. Also contributing to this decline of more than 1.75% were statements by economic heavyweights, including Martin Feldstein, that Greece would inevitably default on its debt.
Leading the Dow down was Chevron (NYSE: CVX), off by about 4 percent. In a surprise move, the International Energy Agency released 60 million barrels of oil to challenge OPEC. Much of the rise in oil has been because of the weak dollar, as fundamental economic demand is not there to support the current high prices.
Falling by more than 3 percent to around $14.75 was Alcoa (NYSE: AA). Alcoa had been up earlier in the week on a statement that there would be higher demand for its aluminum products. But with robust economic growth looking less likely, there will be a reduced need for aluminum.
ExxonMobil (NYSE: XOM) also was off by more than 3 percent, trading early around $77.50. Lower crude prices from lesser demand and greater supply will bring ExxonMobil’s earnings down, too, along with the rest of the oil companies.
The only Dow Jones stock up early was Home Depot (NYSE: HD). A loser yesterday, Home Depot was cited in report from The Street on “5 Discount Stocks from the Dow this Summer.” Home Depot has suffered from the collapse in the US real estate market.
Bank of America (NYSE: BAC) was off little more than a point in early trading at under $11. At this level, buyers consider Bank of America too cheap not to own.
Also mentioned as a bargain stock by The Street was Hewlett-Packard (NYSE: HPQ). Trading under $35, Hewlett-Packard is down by about 1 percent.
Jonathan Yates does not own of the stocks mentioned in the article.