Chris Cantell Discusses Markets: The stocks on Wall Street are falling by kristina leskova

High oil prices, weak retail sales and still increasing inflation – this is the picture of last days. The economy is in recession. The U.S. dollar is weaker to some currencies, decreased to 109.64 yen, but the dollar gained against the euro, for one euro you can get 1.4651 dollars. The Dow Jones index lost 130 points, that is about 1,1%. The Standard&Poor´s 500 index lost 0,9% and the Nasdaq lost 1,4%. In July the oil prices were about 147 dollars a barrel and the stock market seemed to be at the bottom. Since that time oil prices have fallen and the stocks have recovered a little. But as the forecasts say this trend will not continue. The Producer Price index – a measure of inflation rose in July by 1,2% , what was more than double that expected the economists. The chain stores reported lower results, too. The Japanese shares are falling as they follow the drop on Wall Street. The Nikkei 225 index sank 300,40 points, or 2,28 percent, to 12,865.05. The Topix index slid 2,23 percent to 1,235.54. What are the reasons of this situation? The analytics see 3 reasons – the fear of credit crisis, the increasing price of crude oil and the decline of retail revenues. The stocks of two biggest American bond companies - Fannie Mae and Freddie Mac decreased by more than 20 percent. Both these corporations are government sponsored enterprises of the United States. They are authorized to make loans and loan guarantees.

related story: http://news.yahoo.com/s/ap/20080819/ap_on_bi_st_ma_re/wall_street;_ylt=ApuAKzpvs.4Rq6XFALif5WWs0NUE

by kristina leskova for PocketNews (http://pocketnews.tv)

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posted by Lucia Adamova