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Rough Day on Dow

On Saturday June 7th, 2008, in Business, News, by Michael Watson
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NEW YORK - APRIL 25:  A display board of the New York Stock Exchange shows the Dow Jones Industrial average (DJIA) at 13,047.15  April 25, 2007 in New York City. The Dow Jones Industrial average climbed past 13,000 for the first time, fueled by stronger than anticipated earnings reports.  (Photo by Stephen Chernin/Getty Images)

Image by Getty Images via Daylife

Today was definitely a rough day on the Dow Jones Industrial Average Index. The Dow closed today at 12,209 down roughly 395 points. Much of this is due to increasing oil costs. The cost of oil went up 10 dollars, an 8% increase, today to reach a high of 138 dollars a barrel. Analysts conclude that speculation greatly affects rising prices but that may not be the case. This escalation is due to high demand in developing nations and a smaller more volatile supply locally and globally. Rising oil prices are just another added stress to the already highly volitile stock market right now and will result in a scary future as speculation has oil prices surpassing the 150 dollars by July 4th.

Due to frightening speculation about raging gas prices and a highly volatile market, many investors are pulling back from the stock exchange and are currently in a holding pattern. This is resulting in a slowing economy and does not contribute to oil prices lowering. In fact, usually investors are able to counteract rising prices but this wont happen if major investors are holding onto their money. Analysts are also talking about how the government might and should open up the national oil reserves sooner than later so that prices will start to decline. As prices start to decline then the angst against sky rocking gas prices will settle and companies will be able to focus on higher earnings and lower costs.

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