Market Plummets to Start Year

Weak manufacturing, surging oil prices sink stocks
By Jonas Oransky,  Newser Staff
Posted Jan 2, 2008 3:28 PM CST
Traders gather at a post on the floor of the New York Stock Exchange Wednesday Jan. 2, 2008. Stocks fell Wednesday after a weaker-than-expected reading on the manufacturing sector triggered concerns of...   (Associated Press)
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(Newser) – The Dow fell 214.11 to 13,050.71 today, giving 2008 its first record: biggest point drop to start a year. Climbing commodity prices and poor manufacturing readings led the sharp 1.7% decline, and spiking crude oil futures sealed the bearish day. One strategist fretted over the Institute of Supply Management’s weakest manufacturing figures in four years, warning of “a slowdown in economic activity.”

The Nasdaq slid 39.68 points to close at 2,612.6 points, and the S&P slipped 18.58 to 1,449.78, MarketWatch reports. The morning was bullish after minutes from the Fed’s December meeting suggested more rate cuts could materialize—but the spike in oil to more than $100 a barrel raised anxiety about energy prices. Said the strategist of the commodities rise, “High inflation could lead to stagflation in the first quarter.”