DJIA Plunges Below 10,000 in Perfect Storm

In it’s fourth losing session in a row, the DJIA plunged 268 points to 9870. The plunge started at the opening bell and deepened throughout the day.

The massive sell-off was due to a “perfect storm” caused by two separate reports from the Conference Board.

Chinese Demand Falling

The collapse started after the Conference Board, a private research firm, published revised statistics for it’s Chinese economic index for the month of April — two months in the past. The revised number dropped from 1.7% to just 0.3%. The revised numbers caused the Shanghai Composite to fall more than 4% and the DJIA to fall more than 2%.

This news hit commodity stocks the hardest, including mining and refining companies. Commodity prices themselves were also hit hard, including copper, oil, and even gold.

Consumer Confidence Falling

The second hit from the Conference Board was the release of new consumer confidence numbers. The Consumer Confidence Index plunged almost ten points from May’s 62.7 to 52.9 in the just-released June numbers. Economists, continuing their trend of unreasonable optimism, had predicted a rise to 62.8.

This news added consumer sensitive stocks such as retailers and automakers to the long list of casualties.

CitiBank Plunge

In addition, trading on CitiBank shares was automatically halted because the shares fell 17% below the opening price. Trading was allowed to resume a short time later.

CitiBank’s troubles are not directly connected to the fall in either Chinese or Consumer demand.

This drop appears to be part of a larger, though still nascent, bear market which should be expected to last for the next two to three years.