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President's Bungle Short-circuits Rally - Money Matters for 9/26/05 Don Bravo | 9/26/05
Don't say that politics aren't perfectly at home in economic markets.
After a weekend which witnessed the landfall of hurricane Rita as a category 3 storm and limited damage to oil rigs and refineries around the Texas/Louisiana coastline, President Bush announced just after noon that the government planned to tap the nation's strategic oil reserves.
In an Associated Press story by Lara Jakes Jordan, Bush also urged Americans not to make unnecessary trips.
"It's important for our people to know that we understand the situation and we're willing to use the Strategic Petroleum Reserve to mitigate any shortfall in crude oil that could affect our consumers," said the President.
As news of Bush's announcement reached the street, selling ensued - cutting short a rally of more than 80 points to the good on the Dow - and oil prices began to rise.
Bush's message - devoid of any concrete evidence - that there were gasoline and oil shortages in the US, sent an immediate message to investors that was both contradictory and chilling.
While most of the information concerning refineries and oil production platforms has been positive in Rita's aftermath - that there was little damage to facilities - the president's message today came as a sort of unexpected aftershock to traders who had thought the worst scenarios had not come to pass.
Whatever the case, Bush's gaffe was seemingly not necessary nor appreciated by investors, who sent stocks south, with both the Dow and Nasdaq briefly going into negative territory between 2 and 3 pm, before recovering slightly into the close.
Whether there is or isn't a supply problem may be something only oil executives and the President knows, but one thing is certain - President Bush seemingly can't resist any and all opportunities to place his foot firmly inside his big mouth making us all victims of his misappropriate mouthings.
BY THE NUMBERS:
Dow Jones: +24.04; 10,443.63 close
NYSE Advancers: 1843
Nasdaq Advancers: 1793
NYSE New Highs: 117
Nasdaq New Highs: 92
Gold: +2.30; 469.50 close
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