U.S. Stock Market 1st Half Performance Worst 12-Month Run Since 2003

Washington, D.C. (AHN) - All indicators point to a bad first half in 2008 for the U.S. Home prices continue to plummet, while foreclosures rise, banks write off more bad loans and gasoline and food prices are soaring.

The bleak first half picture was best portrayed by the stock market's worst 12-month run since the spring of 2003. Standard and Poor's 500-stock index tumbled down by 12.8 percent from January to June, with the June index at its worse performance since 1930. The Dow Jones industrial average also went down by 14.4 percent for the first six months of 2008.

Another measures of the weakening American economy was the drop at a yearly rate of 9.1 percent of total bank loans, leases and securities holdings for the last 13 weeks, its fastest decline in 35 years.

The financial sector's woes would soon be communicated to the rest of the U.S. economy, forecasts Douglas Peta, market strategist of J and W Seligman and Company.

Jane Caron, chief economic strategist of Dwight Asset Management, observed, quoted by the New York Times, "We haven't had the sense that we had the downward spiral in anything other than housing... What I am worried about is that we are headed in a direction where those negative feedback loops expand and intensify."

Meanwhile, billionaire investor Eli Broad said the current U.S. recession is the worse since World War II. "This is the worst period of my adult lifetime... I do not think things are going to get any better before the next president takes office in January," Broad told Bloomberg.

Broad added the U.S. recession should not worsen further to the level of the 1930s depression because the country has enough safety nets. To fix the damaged of the U.S. economy, Broad said political leadership on energy, health care and education policies must be exercised.