More stock market woe: Blame the hurricanes

Industrial production goes off a cliff and the stock market follows. Monday's rally? Gone, baby, gone.

By Andrew Leonard
Published October 16, 2008 3:07PM (EDT)

As of 11 a.m. Eastern, the entirety of Monday's 936-point rise in the Dow Jones industrial average had evaporated. The Dow was down 280 points.

I guess investors are not quite buying the spin that September's 2.8 percent drop in industrial production in the United States, the sharpest drop in 34 years, can be blamed on a strike at Boeing and Hurricanes Ike and Gustav.

That's how the Wall Street Journal headline reads: "Industrial output took its deepest plunge in nearly 34 years on hurricanes and labor unrest."

Seems to me that we've had some bad hurricanes and labor unrest in the decades since 1974. Perhaps there's some other explanation.

Of historical interest: December 1974 marked the end of the stock market downturn precipitated by the oil shock of 1973. Not sure what to make of that, other than to suggest that perhaps there's a bottom to be found around here somewhere. But I don't feel confident in that assumption.

UPDATE: Lesson No. 47 in why one should always be cautious with intra-day market updates.  An hour and a half after this post was published, the Dow had moved back into positive territory.

LATER UPDATE: ....And the Dow closes up 401 points.  Please burn this post after reading.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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