Newspaper article St Louis Post-Dispatch (MO)

Inflation Isn't the Only Pitfall for Stocks

Newspaper article St Louis Post-Dispatch (MO)

Inflation Isn't the Only Pitfall for Stocks

Article excerpt

The inflation specter spooked the stock market this past week, but there are plenty of other reasons that the fall season may be a harrowing one for investors.

A potential shooting war with Haiti or a trade war with Japan, along with historic seasonal weakness, are some of the factors analysts cite in making bearish predictions for the next few months.

Nonetheless, if the Federal Reserve Board finally gets a handle on rising prices without stifling economic growth, 1995 will be brighter, they are quick to add.

Friday's Labor Department report said wholesale prices rose an unexpected 0.6 percent in August. With most analysts expecting 0.3 percent, financial markets took a big hit. The Dow Jones industrial average was down 33.65 points.

The drop stalled a late summer rally that had prompted predictions of new records by year's end.

Now, another Fed tightening seems a certainty, perhaps later this month. That could send shares even lower as investors fret that higher rates will stall the economy and raise borrowing rates, leading to declining corporate profits. …

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