Stocks Continue Tumble
-- February 13, 2003
The Dow Jones Industrial Average fell to its lowest point in four months, and it's not over yet. Not surprisingly, heightened fears of terrorist activity and an impending war with Iraq have investors running for the exits. Plus, no matter how much Wall Street tried to spin today's worse-than-expected retail sales data, investors weren't buying it.
Retail sales plunged 0.9% in January, mainly due to a huge decline in auto sales. Excluding auto sales, retail sales did rise 1.3%, but that, by no means, points to a healthy economy. Just look at the areas in which sales rose: Building supplies, grocery stores, and gas stations. This tells us that consumers are stocking up on only the necessities: Food, fuel, and housing. Furniture and electronics sales, on the other hand, tanked in January. And when war begins, whether it's waged by terrorists or by the U.S., consumers will cut their spending to the bare bones. This will knock the economy down even further.
Smart investors will use any temporary rally to get out. That's because once war begins, remaining stock market investors will dump their shares and run for cover.
Stocks Drop Again on War, Attack Fears