Stock Market Plummets on Corporate Earnings Forecasts

Despite unprecedented and far-reaching economic bail-out and stimulus packages being implemented around the world, Wall Street stocks fell hard and fast today as investors focused on corporate earnings forecasts for the coming months.

Major companies have been releasing less-than-encouraging profit forecasts for the fourth quarter, such as DuPont Co., Sun Microsystems Inc. and Texas Instruments. As of the writing of this article, the Dow was down roughly 350 points on the day, after recovering slightly from an initial loss of over 400 points.

Many economists and market experts seem to think that while the cash infusions into the credit markets have limited some of the damage that may have otherwise occurred, the overall economy is headed for a prolonged recession that will put a strain on most companies and the labor force. But overall, much of the current situation in with the stock market is based purely on fear and the perception that prosperous times might never return. Irrational, yes, but it's human nature to resort to a herd mentality in times of grave uncertainty -- and that's what we're seeing with the stock market.

On a positive note for consumers, gas prices continue to fall at the pump, while the price of oil has dropped below $67 per barrel. A stronger U.S. dollar has recently trumped concerns about OPEC reducing oil output in the near term.

The current economic downturn is truly a global occurrence, with stocks in Japan, Great Britain, Germany and France all falling at least 4% today. Until credit markets loosen companies are able to access capital for growth, it is likely that the current climate will remain unchanged. But just when you think things can only get worse, they’ll likely get better. Hopefully our money’s in the right place when that happens.