Chris Cantell Discusses Markets: Current situation on stock markets by Martina Janeckova

Stocks sank in light trading on Monday, August 25. The Dow Jones industrial average fell 241.81, or 2.08 percent, to 11,386.25. This erased the gain of about 200 points on Friday when oil dropped more than $6 a barrel. Among the stocks that make up the Dow industrials New York-based AIG declined most after a Credit Suisse analyst cut his price target on AIG and forecast further losses. On Friday Fitch Ratings also warned that it may cut its ratings on this company. AIG fell $1.09, or 5.5 percent, to $18.78. Broader stock indicators also fell Monday. The Standard & Poor's 500 index declined 25.36, or 1.96 percent, to 1,266.84, and the Nasdaq composite index fell 49.12, or 2.03 percent, to 2,365.59. Bonds increased on Monday as stocks fell. The dollar was mixed against other major currencies, while gold prices fell. Light, sweet crude rose 52 cents to settle at $115.11 per barrel on the New York Mercantile Exchange after Tropical Storm Gustav formed in the Caribbean. On Monday investors focused mainly on troubles in financial sector. JPMorgan Chase & Co. fell $1.54, or 4.1 percent, to $36.13 – the bank revealed that its $1.2 billion in preferred stock in Fannie Mae and Freddie Mac has lost $600 million in value so far during third quarter. The market was influenced by low volume of trades, which also increased the volatility. On the New York Stock Exchange, the volume was only 865.2 million shares compared with 888.6 million on Friday. Alfred E. Goldman, chief market strategist at Wachovia Securities predicted that “The whole week is going to be a do-nothing week.”

by Martina Janeckova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova