This is The Wall Street Digest Hotline Update for Friday, August 1, 2008, at 6:00 p.m. EST.
Oil prices were up slightly today, while stock prices were down slightly. At the closing bell, the Dow lost 51 points, closing at 11,326, while the Nasdaq fell 14 points, closing at 2,310. The S&P 500 closed 7 points lower at 1,260. Oil closed $1.02 higher at $125.10 per barrel, and gold closed $5.20 lower at $917.50 an ounce.
This week's unemployment report indicated that 51,000 jobs disappeared in July, inching the unemployment rate higher to 5.7 percent.
The price of oil continues to weigh on the market. GM announced a $15.5 billion quarterly loss, along with a 32.4 percent sales decline in July. Ford sales were down 21.5 percent; and Toyota was down 18.7 percent. Chrysler was also down 34.2 percent in July.
With slowing economic growth, home prices will continue to fall. 2.5 million homes will face foreclosure over the next twelve months. I don't see a housing bottom until late 2009, at the earliest.
Keep in mind that market bottoms in August and September are rare. I will continue to trim positions from our portfolio as needed. Biotechnology is the new market leader. Stay close to our Tuesday/Friday Hotline Updates.
The next Hotline Update will be on Tuesday, August 5, 2008, at 6:00 p.m. EST.