Wednesday, July 2, 2008

US Stock Market Posts Worst Monthly Decline Since 1930s

US Stock Market Posts Worst Monthly Decline Since 1930s

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The U.S. stock markets fluctuated wildly on Monday as investors worried about another spike in oil prices and new concerns about inflation. Despite some strength in afternoon trading, analysts say record oil prices and continuing fears about the U.S. economy have helped push the Dow Jones Industrial Average to its worst month since the Great Depression of the 1930s. VOA's Mil Arcega reports.

Wall Street opened on shaky ground after Friday's stock market plunge - when the Dow Jones Industrial Average closed more than four percent lower for the week.

With oil prices climbing briefly above $143 a barrel for the first time on Monday, investors were anxious.

The Dow Jones Average of 30 of the most widely held U.S. companies is only one indicator of the nation's economic health. The Dow has fallen nearly 20 percent since October.

Economist Mark Zandi says you don't have to be an investor to feel the effects.

"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 is rising. It's just a very difficult time," he said.

And difficult times mean difficult choices.

In Chula Vista, California, the local government has cancelled the upcoming fourth of July celebrations because of a lack of funds.

In Massachusetts, some towns are struggling to raise money for fireworks.

And some motorists wonder how high gasoline prices will go before they are forced to park their cars - or for California biker Brian Hanable, to leave his motorcycle at home.

"I could maybe do five, but once it gets close to $6 a gallon it really starts to make you think a lot," he says.

Despite the economic difficulties facing many people, Zandi says it is not all gloom and doom.

He adds, "There are a lot of correctives going on. In the energy markets we're seeing more supply come on. House prices is a problem for homeowners but for first time buyers this is great. Housing's going to become more affordable."

But there could be more bad news for the economy before the week is out.

A report on automobile sales for the month of June comes out on Wednesday followed by the government's monthly employment report on Thursday. Analysts predict neither report will bring good news.

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