US stocks slide as Dow falls under 8200 for the first time since May 1, as more steam comes out of the market’s rally. That’s fueling more talk of a second stimulus package, some of it from the administration itself, even though the first one’s just cranking up. (Video commentary here.)
Meanwhile, auto-parts maker Lear files for bankruptcy protection, the eighth auto-parts maker to do so so far, and surely not the last. And while Lear pretty much worked out all the messy details ahead of the filing, it is a large supplier and there’s some worries about the possible knock-on effects.
DJIA drops 161 (1.9%) to 8164, lowest close since April 28. S&P loses 18 (2%) to 881; index’s midafternoon slide below 890 opened door for more selling. Nasdaq Comp falls 41 (2.3%) to 1746, DJ Transports slide 3.2%. Stocks close near session lows; volume’s weak. Crude slides below $63/bbl.
We’ve been doubting the rally since it started, so we’re not surprised to see this turn of the screw. But, boy, if the indexes really do sink back to a retest of the March lows, you’re going to see a lot of nervous people walking around New York and Washington, and everywhere else, actually. And if they fail that test, well, at the least, you can stop waiting for those consumer confidence reports to come out.
And how about this story from the WTO, that it thinks the worst social and political effects of the crisis haven’t been felt yet, and when they hit it could result in more trade protectionism. Ah, won’t that be just grand?