The U.S. stock market closed in negative territory today, with the Dow Jones Industrial Average (DJIA) losing 60 points, or 0.5 percent, to 12,411 by the 4:00pm Eastern Time closing bell. The NASDAQ Composite tech stock index retreated 0.6% to 2,708 while the S&P 500 lost 0.57 percent to close at 1,288 points.
Alpha Natural Resources
Shares for Alpha Natural Resources Inc. (NYSE:ANR) dove over 11 percent to near $20.00 per share during Friday’s stock market trading session as the coal producer looks ahead to additional fallout from the April 2010 West Virginia mine explosion that resulted in the death of 29 men. Although the company has settled the wrongful death suits filed by families of those who died, the possibility of criminal prosecution remains according to the U.S. Department of Justice, which is looking into whether to bring charges against individuals who were in charge of the mine at the time of the disaster.
Referring to the potential criminal charges, U.S. Attorney Booth Goodwin stated earlier this week, “It’s a matter of reaching a point in the investigation where we have the evidence to prove beyond a reasonable doubt that a federal crime has been committed, and if so, who committed it. The reality is that the allegations in these reports would require much more investigation to bring and win criminal convictions.”
Alpha Natural Resources reported a $0.35 Earnings Per Share on its most recent financial statement with a Price to Earnings ratio of 57.33 and a market capitalization of $4.43 billion. Below is the 2012 Year To Date stock chart for ANR.
European Credit Downgrade
The “imminent” Standard & Poor’s credit downgrade of one or more sovereign countries within the Eurozone shook markets Friday, as financial stocks such as Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JPMorgan Chase (NYSE:JPM) lost market value. France’s Finance Minister announced Friday afternoon that the country would indeed lose S&P’s AAA credit rating on its sovereign debt.
Investors continued to transfer assets into the perceived safe haven of U.S. debt as yields for 10-year Treasury notes dropped to 1.84 percent. A credit downgrade could prove to be a sharp blow against EU countries which have already experienced as significant increase in borrowing costs as bond buyers demand higher interest payments in exchange for sovereign expenditure funding.
Regional banks received 489 billion euros from the European Central Bank last month to help ease lending restrictions and promote bond purchases. However, those financial institutions appear to be hoarding their recently received cash instead of investing in sovereign debt.
The Euro lost more value against the U.S. Dollar Friday, closing at $1.2654.
Oil and Precious Metals
The price of crude oil moved down Friday to $98.73 per barrel while gold decreased $13.60 to $1,635.10 by market close. The price of silver was also down following today’s trading session, closing at $29.56 per ounce.
Sears Financing Problems
Yesterday, representatives of CIT Group announced that the company would no longer provide financing to Sears retailers, leaving Sears and Kmart looking for other options to fund its product shipments. The credit crunch could force Sears, which announced last week it will be closing up to 120 stores, to seek lending at a higher interest rate.
The Stock Market and Your IRA
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