Wednesday, July 2, 2008

Dow Jones breaks Great Depression record for poor performance

Dow Jones breaks Great Depression record for poor performance

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It is a downtrodden Dow Jones that opens this morning, teetering on the edge of Bear Market Territory.

"We'll see what happens in the first half-hour on Monday," one trader told ABC News.

It doesn't matter what happens on Wall Street. In Chula Vista, Calif. residents there won't see fireworks. The city dropped a bombshell instead: the 4th of July is cancelled for lack of funds.

"I think it's the right thing to do, when you're looking at police and fire," one Chula Vista resident said.

The Dow Jones index has plunged more than 10 percent this month, marking the worst June performance since the Great Depression.

"Nothing's going right for the average American household: Gas prices are at record highs, stock prices are falling, housing values are evaporating, we' re losing jobs, unemployment rising. It's just a very difficult time," Moody's Economist Mark Zandi said.

Getting from here to there is more difficult as well. Boating is way down. Airline prices are way up. Even filling the gas tank has people doing the math. "I could maybe do $5. But once it gets close to $6 a gallon, it really makes you think a lot," Brian Hanable, a motorcycle rider from California, said.

On the minds of investors? Stagflation, quickening inflation combined with slowing economic growth.

Oil prices are already up this morning as a result of brewing Middle East tensions, and Asian stocks posted their worst first-half performance in 16 years.

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