Dubai Sends the Stock Market Reeling
I took it easy yesterday, enjoying some turkey and potatoes, eating some pie. And then I slept in today. Little did I know that I was going to wake to a financial disaster. Maybe this isn’t as huge as the global financial crisis that hit last year, but the whole things with Dubai is still pretty big news. Dubai World Conglomerate, which represents a large portion of money, has asked for time from its creditors while it restructures. This debt crisis is one that is affecting emerging markets, and making waves over here in the U.S. as the Dow plunged 200 points upon opening. While U.S. stocks are paring their losses, the Dow still remains down close to 150 points.
Trading is already expected to be thin today, as is tradition on Black Friday. The markets will close early anyway, but one hopes too much damage hasn’t been done. There had been talk of a relatively staid trading day, with modest gains, on the optimism with regard to this year’s retail success on Black Friday. The news out of Dubai, however, has changed the entire picture, and any optimism over Black Friday is being overshadowed by the Dubai debt crisis. MarketWatch offers this on the Dubai story:
The broad stock declines and moves into the safety of the dollar and Treasurys come as fears have been spreading since late Wednesday about the potential fallout of debt problems at Dubai World, the city-state’s largest corporate entity, which asked creditors for a six-month stay on repayment of its $60 billion in debts.
U.S. markets were unable to immediately react as they were closed for the Thanksgiving holiday Thursday, but the Asia and Europe markets sold off Thursday on the news.
Clearly, things are a little more exciting than anticipated, and clearly it is going to be a rough day on the stock market. We will have to see what the weekend does for traders, and what they make of the issue after having a couple of days to mull it over.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.
Image source: lardo via Wickimedia Commons
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