January Was Dow’s Worst in 113 Years – WSJ

Wall Street Journal
January 31, 2009

Stocks finished their weakest January on record with a decline on Friday after a report that the economy shrank at the fastest rate in 26 years.

The Dow Jones Industrial Average ended at 8000.86, down 148.15 points, or 1.82%, off 0.95% for the week and 8.84% for the month. It was the worst January in its 113-year history and the fifth consecutive month of declines. The 31% decline over the five months was the sharpest since the five months ended December 1937.

Only two stocks in the Dow rose in the latest month. International Business Machines was up 8.9% and Kraft Foods rose 4.5%. Bank of America led the declines, down 53% for the month, followed by a 47% drop forCitigroup.

Historically, stocks’ performance in January often foretold performance for the year. For the Dow, January has accurately predicted the year’s direction 75% of the time. In the past 30 years, it has been right 26 times.

The Standard & Poor’s 500-stock index fell 2.28% Friday to 825.88, down 0.73% for the week and off 8.57% in January, also its worst January.

Stocks popped at the open Friday, but spent most of the day in the red. Traders cited fears that plans wouldn’t go forward for a so-called bad bank to soak up toxic assets from financial institutions, and bleak economic news, in particular Friday’s report of a 3.8% contraction in GDP in the fourth quarter.

“Smart investors are sitting on the sidelines,” said David Henderson, president of Raven Securities. “There’s not much conviction one way or the other.”

Gold, a traditional haven, gained amid the uncertainty. Gold futures rose 2.45% Friday to $927.30, up 4.95% for the month.

Oil futures rose 0.58% to $41.68 a barrel but were down 6.55% in January, the seventh consecutive monthly decline.

Write to Annelena Lobb at annelena.lobb@wsj.com

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One Response to “January Was Dow’s Worst in 113 Years – WSJ”

  1. […] January Was Dow’s Worst in 113 Years – WSJ « Ned Grace’s Blog Site […]

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