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Roller Coaster Ride On The Dow Ends As Index Closes Up 61 Points

Many Feel Relieved, But Experts Say Country's Economic Problems Run Deep

NEW YORK (CBSNewYork) — It was a wild ride on Wall Street as the Dow Jones Industrial Average swung more than 400 points before finishing up nearly 61 points on Friday. A slight dip in the unemployment rate gave the stocks an early boost, but Europe’s debt crisis stole the spotlight.

“The story remains Europe, basically Italy is driving this bus,” trader Art Cashin told CBS 2’s Alexis Christoforous.

The S&P 500 closed down a point (0.1 percent) at 1,199. The Nasdaq composite index closed down 24  points  (0.9 percent) at 2,532.

Recent data showed the overall economy is still weak. The U.S. economy barely grew in the first half of the year. Consumer confidence is down and both manufacturing and the housing markets have slowed.

Traders will be looking for help from Federal Reserve Chairman Ben Bernanke when the Fed meets on Tuesday.

“We are going to ask if he’s got some kind of plan here to move and they don’t have a lot of room on that balance sheet,” Cashin said. “It’s very, very crowded.”

Friday’s roller coaster day came after a 513-point plummet on Thursday that marked the ninth-steepest decline in stock market history.

Related: Complete Stock Market Coverage from CBS Money Watch

In the first minutes of trading Friday, the Dow jumped up 171 points. The blue chip index continued to ping-pong back and forth into the afternoon as uncertainty ruled the market.

Traders may have been soothed by the better-than-expected July jobs report. The unemployment rate dipped to 9.1 percent and the Labor Department said employers added 117,000 jobs last month — an improvement from the past two months.

While there was relief the unemployment numbers took a dip, many saw little cause for celebration. There are still an estimated 13 million people who are jobless in America.

Among them is Brooklyn’s Edgar Telesford, who has a biology degree and an MBA. He said he has been looking for work for a year.

“Those statistics haven’t yet trickled down to me,” he told CBS 2’s Sean Hennessey.

Less than a half an hour after the big leap at the open, stocks had given up their gains. By noon, the Dow had dropped 200 points. Those losses were short-lived. At 1 p.m., the bulls were back, and the Dow climbed into positive territory, up 100. An hour later, the Dow was still holding on.

WCBS 880’s Alex Silverman With Reaction On Wall Street To The Economic News

Thursday’s 513-point drop brought the market down 10 percent since the spring — what investors call a “correction.” It was the largest decline since 2008.

New York is the beating heart of the global financial system, and many here depend on the financial sector for their livelihood. Local issues aren’t to blame for the recent market jitters. The problems are bigger.

“There are just too many economic unknowns in this country,” said Wall Street trader Ted Weisberg. “In the Euro zone, lack of clarity about our economic policies going forward” also contributed to the sell off, Weisberg added.

What happened on Wall Street has worldwide implications: global stock markets tumbled early Friday. For more information on what’s cooking with the markets globally, check out coverage from our colleagues at CBS Money Watch.

WCBS 880’s Steve Scott With Fred Rozell, Director Of Retail Pricing And Business Development At The Oil Price Information Service In Wall, NJ

Investors focused on Europe’s debt struggles and the fear of another recession. Italy and Spain face enormous debts while Germany said its industrial production declined 1.1 percent in June. The U.S. also plans to cut spending by $2.4 trillion over the next decade.

“There’s just a lot of pessimism out there now,” said Andrew Lebow, a senior vice president and oil broker at MF Global.

But oil’s drop could bring relief to motorists within days. Lower oil should push down gasoline prices, which are down from a peak in May.

Investors have worried about international oil supplies since February, when an uprising in Libya forced the country to shut down oil fields that exported 1.5 million barrels per day of high-quality crude.

Are you concerned about the stock market decline? Sound off in our comments section.

More from Alex Silverman
  • Kline Derek

    By the way I just paid $22.87 for an iPad2-64GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $675 which only cost me $62.81 to buy. Here is the website we use to get it all from,

  • Ryszard Ewiak

    Before us is the economic and political earthquake. The Bible says: “At the time appointed he [the king of the north = Russia] will return back.” (Daniel 11:29a) It also means the disintegration of the European Union and NATO. This will be a prelude to the war. (Daniel 11:29b, 30a; Matthew 24:7) It will be a nuclear war. (Revelation 6:4) “A great sword” = a nuclear sword. It will not be the end of the world. It will be “the beginning of birth pangs”. (Mark 13:8)

  • Lawn-Guy Land

    The market will do whatever the manipulators choose for it to do. Yesterday, they decided to make their money by depressing the market. Some other day, they’ll decide to make their money by growing the market. We mere mortals must grin and bear it.

  • Ellen

    Please people keep in mind that attitude is everything. Don’t let this get you down in the dumps, keep optimistic and have faith that things will get better. My God if the World War 11 generation who went through the Great Depression had hope and faith that better days would come along then we should follow their mind set and do the same.

  • Marc

    We’ve heard about irrational exhuberance. Well this is irrational pessimism. The market should not be freefalling on a day when General Motors and Kraft report excellent earnings. As Roosevelt said “We have nothing to fear but fear itself”.

  • edward

    The result of threatened cuts as opposed to job stimulation and the overwhelming sense of disgust ofmost Americans with a dysfunctional government.

    • tom

      That’s exactly correct.

  • michaelfury
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