BUSINESS &
FINANCE

STUNNINGLY, the Dow Jones Industrial Average (DJIA), composed of America's most well-known and profitable companies - the so called Blue Chips - slipped nearly 108 points Friday to close at a level not seen since November 24, 2003.

The DJIA closed at 9,757.81, Down 107.95 points. The lowest level of 2004 and the lowest since the Dow closed at 9,747.79 in late November of 2003. The move was not unanticipated, as the Dow, and other major averages - particularly the NASDAQ and S & P 500 - have been vacillating and trending downward since early Spring.

Analysts, investors and financial reporters lay the blame squarely on the high price of oil, which has risen over 70% this year, closing Friday at $55.17 a gallon on the NY Mercantile Exchange, a new settlement record.

Amid mixed economic reports showing the US economy mired in a slow-growth phase with limited expectations for improvement soon, a war effort which is increasingly being viewed as deteriorating and possibly immoral, and the heat of a presidential election, many investors are skittish and heading for the safety of cash or fixed investments.

The US trade imbalance and the federal government record deficits also add to the insecurity on Wall Street. Additionally, a raft of fresh regulatory allegations and investigations hit high profile firms in the past week. The SEC wants a look at the pension accounting practices of automakers General Motors and Ford and defense contractor Boeing, while the Justice Department has convened a Grand Jury to look into questionable practices by insurance giant AIG. Already under scrutiny is insurer Marsh & McClennon, as the developing insurance scandal widens and deepens. Various state attorneys general have begun issuing subpoenas on insurers and brokers.

With all the uncertainty in the air, it's little surprise that investors may want to get out of the way of what seems to be a certain train wreck. In the back of many minds is the specter of October 1929, when rampant speculation resulted in the crash of the stock market, engendered by emotional selling on the 28th and Black Tuesday, the 29th which saw the DJIA drop by more than 11 percent amid record volume. Coupled with the more than 12% decline on the 28th, the financial markets were wrecked, ushering in a worldwide depression.

While most clear-headed investors and analysts are not about to predict a 75th anniversary redux, October is generally considered a bad month for investors even though the opposite is true. Over the years, stocks show a net gain for the month.

Still, developments in the oil markets and ongoing investigations auger nothing even remotely resembling a safe environment for money. The dollar continues to slide against other currencies, Friday being no exception as the greenback slipped to an eight-month low against the euro, coupled with 8-year and 12-year lows against the Swiss franc and the Canadian dollar, respectively.

If all of this sounds like bad news, bear in mind that Wall Street analysts are nearly all bullish - and have been all year, Fed Chairman Alan Greenspan says he sees little risk in higher oil prices and shares of search engine Google are widely expected to top $200 in short order.

Are we doing 2000 all over again? Who knows? Maybe the Red Sox will win the World Series. Well, that's where I have to draw the line.

Leaving you with plenty to chew on over the weekend,

Don Bravo