U.S. Stocks Slump, Pushing Dow Average to Brink of Bear Market

June 27 (Bloomberg) — U.S. stocks fell, pushing the Dow Jones Industrial Average to the brink of a bear market, on concern subprime-related writedowns at banks will worsen and record oil and a slowing economy will prolong the worst profit decline since 2002.

The Dow extended its retreat from an all-time high in October to almost 20 percent, the threshold for a so-called bear market. American International Group Inc. and Merrill Lynch & Co. helped send the Standard & Poor’s 500 Financials Index to the lowest level since March 2003 on speculation of mounting losses. Consumer stocks in the S&P 500 slipped to a five-year low as oil topped $142 a barrel.

The Dow lost 115.29 points, or 1 percent, to 11,338.13 at 3:31 p.m. in New York, leaving it 6.51 points away from a bear market. The 30-stock measure fell 10 percent this month for the worst June since 1930. The S&P 500 slid 6.50, or 0.5 percent, to 1,276.65. The Nasdaq Composite Index slipped 11.80, or 0.5 percent, to 2,309.57. Seven stocks declined for every four that rose on the New York Stock Exchange.

“This week the news on earnings is that the second quarter is probably going to be worse than we thought,” said Ron Sweet, vice president of equity investments at USAA Investment Management Co., which oversees $100 billion in San Antonio. “The old news keeps sticking around: it’s energy prices, it’s writeoffs at banks, it’s the slow economy.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPHeEBSQBj2k&refer=worldwide

NEW YORK (AP) — Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.

Retail gas prices inched lower overnight, but are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.

Light, sweet crude for August delivery rose as high as $142.99 a barrel on the New York Mercantile Exchange before pulling back sharply in a spate of late-day profit-taking to settle up 57 cents at a record $140.21. On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record.

The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.

“The dollar was slightly stronger, and when it gave up its gains, that gave oil the green light,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

http://biz.yahoo.com/ap/080627/oil_prices.html?.v=7

Analysis: Complex issues remain on NKorea nukes

SEOUL, South Korea – It took years of talks, coddling and concessions to prod North Korea to step back from its decades-long effort to make atomic weapons, leading to Friday’s dramatic destruction of its nuclear reactor cooling tower.

That was the easy part.

Past experience suggests North Korea will seek more rewards before it moves further to disarm. If Pyongyang actually hands over the nuclear bombs believed to be in its arsenal — the country’s most valuable bargaining chips — the communist leadership would only do so after a long wish list of demands is granted.

The North has repeatedly shown a talent for brinksmanship, along with a mastery of playing countries against each other. And Pyongyang is just getting started.

Hints of the problems to come emerged just hours after the reactor tower tumbled to the ground in a cloud of dust and smoke.

While praising the U.S. for starting to remove sanctions, North Korea’s Foreign Ministry said it would closely watch whether the other sides from the arms talks meet their commitments.

http://news.yahoo.com/s/ap/nkorea_after_the_blast

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Report: Climate change linked to national security

By PAMELA HESS, Associated Press Writer

WASHINGTON – Global warming probably will mean more illegal immigration and humanitarian disasters, undermining shaky governments and possibly expanding the terrorism threat against the U.S., intelligence agencies say.
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“Logic suggests the conditions exacerbated (by climate change) would increase the pool of potential recruits for terrorism,” said Tom Fingar, deputy director of national intelligence for analysis.

Sub-Saharan Africa, the Middle East and Central and Southeast Asia are most vulnerable to warming-related drought, flooding, extreme weather and hunger. The assessment warns of a global spillover from increased migration and water-related disputes, Fingar said in prepared remarks Wednesday to a joint hearing of a special House committee on global warming and a House Intelligence subcommittee.

Battle looms over oil drilling off Florida’s coast

By Matthew Bigg

PENSACOLA BEACH, Florida (Reuters) – For decades opposition to oil drilling off Florida’s coast was one of the few issues uniting the state’s Democrats and Republicans, who agreed that shielding the environment and the huge tourism industry came first.

Not now, as oil prices rise and U.S. motorists are paying serious prices at gasoline pumps.

Last week Florida Gov. Charlie Crist, a Republican who often sounds like a Democrat, shattered the consensus by calling for an end to a federal moratorium on oil and gas drilling along the country’s outer continental shelf.

His decision follows the stance of Republican presidential candidate John McCain on an emotional issue before November’s election. Two Republican Florida congressmen also backed Crist.

http://www.reuters.com/article/environmentNews/idUSN2635419220080627?feedType=RSS&feedName=environmentNews&rpc=22&sp=true