Dow Jones finally fell nearly 150 points.
The reason for the fall was blamed at higher oil prices, weak economic indicators and lackluster retail sales
. A variety of gold, silver, steel and oil stocks slumped. Home builders, health care and a variety of tech stocks sank too.
However before this fall, stocks have gained over the last 5 weeks with Dow reaching an all-time high, the S&P 500 within reach of an all-time high and the Nasdaq at a six-year high. Many investors were confused as to why the market reached such levels, even though the dollar is weak, the oil prices are rising and the housing market is bust.
Take a look at this video to understand why the stock market is strong.
- March trade gap widened more than expected and that April import prices rose more than expected, both because of higher oil and gas prices.
- Retailers said April sales were hurt by the impact from higher oil and gas prices and the fallout in the housing market.
- Concerns about Iran, will hurt the U.S. economy, in terms of higher oil prices.
- Fed held interest rates steady, but said that it remains more worried about inflation than the pace of economic growth.
- The U.S. trade deficit widened sharply to $63.9 billion in March, from a revised $57.9 billion in February
Import prices rose 1.3% in April
Oil prices were up 6.5%
Industrial supply prices surged 3.7%
Food prices climbed 1.4%
Export prices rose 0.3%
Jobless claims fell 9,000 to 297,000
Crude oil was up 24 cents to $61.79 a barrel
Gasoline was up 10 cents to $2.3350 a gallon
Gold for June delivery fell $15.50 to settle at $667 an ounce
Conclusion: Bottom line is 1Q earnings that beat forecasts, global growth, corporate deals and mergers, and stock buyback plans all helped the strong market reach all-time high levels. However economic indicators do not look healthy and could lead to a stock meltdown after the earnings season. Beware !!!