NEW YORK – U.S. stocks dropped this morning as a Federal Reserve official acknowledged there “could be” a recession and analysts including top-rated strategists Dresdner Kleinwort said the global selloff isn’t over, Bloomberg News reports.
St. Louis Fed Bank President William Poole today said that, though there “could be” a recession, the central bank doesn’t forecast one and the consensus estimate is for growth of more than 2.5 percent in the coming year.
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The Standard & Poor’s 500 was down 3.15 or 0.2 percent to 1,400.02 as of 10:06 a.m., Bloomberg said, and appeared to be headed for its worst week since September 2003. The Dow Jones Industrial Average slipped 23.95 or 0.2 percent to 12,210.39 points, and the Nasdaq Composite fell 9.64 or 0.4 percent to 2,94.57.
“Stock prices cannot go up indefinitely,” Matthew Kaufler, who helps manage $2.6 billion at Clover Capital Management in Rochester, N.Y., told Bloomberg. “You need to wring a little of the excess out from time to time. It wouldn’t surprise me at all that sometime here in 2007 we have a pullback of 10 percent to 20 percent.”
Today’s retreat followed a fourth straight drop in European shares and a decline in Asia that completed that region’s worst weekly performance since July. The Dow Jones Stoxx 600 Index was down 0.5 percent at 2:30 p.m. in London, while the Morgan Stanley Capital International Asia-Pacific Index slid 0.8 percent.
