Investors are afraid that the growth rate of global economy would not be able to support the stock exchange market of the U.S.

/INTERFAX-AFI, New-York, November 12, 07/ - Fall of American stock market the last week was contributed by the investors' fear that the growth rate of global economy would not be able to support the stock exchange market of the U.S. of the present conditions, The Wall Street Journal informed. This summer when the crisis on credit markets evoked the fall of quotations on American companies' shares, high growth rates of economies of China, India and Europe together with interventions of the Federal reserve system (FRS) convinced the investors to invest capital in the stock exchange market of the U.S., which has led to the rise of indexes up to the new maximums. Now, the biggest financial companies of the world, including Citigroup Inc., Merrill Lynch & Co., Morgan Stanley and Wachovia Corp. record great losses related to the problems in the credit field. At that, FRS of the U.S. expresses its anxiety about the expected slow-down of growth rate of the country's economy. Also, the prospective of economical growth deteriorate in Europe, and the cost of oil approach $100 per barrel. Taking into account these factors, investors worry whether the means taken by FRS and also the groping Chinese economy will be sufficient to retain the American stock market from sharp falling. Demand for stocks from the side of hedge, pension and mutual funds, under the management of which are the assets to the sum of billions of dollars, has weakened lately. That contributed to the fall of Dow Jones Industrial Average stock index over the last three trading sessions of the last week by 4.5%, which has become the maximal tree-day reduction of this indicator since 2002 - down to 13042.74 points. Department manager of New York Life Investment Management in New York Richard Rosen shrinks the fund's investments not only in financial companies such as Merrill Lynch and Wells Fargo, but also in the oil ones that he had preferred to buy recently. Wane Wicker from Vantagepoint Funds, under management of which are assets to the sum of $33 bn., established a new investment fund that trades with future that suppose the fall of U.S. stock exchange market. Statistical data, publication of which will take place the next week, will, probably, witness the weakening of the American economy. According to the forecast of the economists, questioned by Bloomberg, the pace of retail sales growth in the U.S. slowed down in October against a background of increase in prices for oil and decrease in housing prices. As it is expected, this indicator grew by 0.2% after an increase by 0.6% a month earlier. Ministry of trade of the U.S. publishes the data about retail sales on November 14 at 4:30 of Moscow time. Consumer expenditures that are the main mover of the country's economical growth keeps decreasing as, taking into account the growing outlay for energy resources, the Americans have to save on other goods. Rise of prices for fuel support inflationary risks, which, probably, will not let FRS reduce the level of base rate in the near future, the experts note. "Obviously, the population's expenditures decrease, - says the principal economist of Wachovia Corp. Mark Vitner. - First of all, this is related to the growth of price for fuel. The Americans reduce outlay on other needs". The forecasted increase in retail sales in October is minimal for the four month. Sales excluding those of cars, as it was anticipated, grew by 0.3% after the growth by 0.4% in September. According to the data of Retail Metrics LLC, seven of ten companies of retail sales business, including Wal-Mart Stores Inc. and Macy's Inc., announced the sales that were worse than the analysts' outlooks in October. By the message of International Council of Shopping Centers, sales of retail business chains increased the last month on average by 1.6%, which became the weakest October indicator since 1995. The result turned to be worse than the analysts' outlooks that were at 2%, and that points to the idea that the shrinkage of the indicators during the time of holiday season can be expected, the experts note. Problems of American housing market contributed to the decrease of demand for furniture and goods of housing. As it is previewed, data about incomplete deals on purchase of houses on secondary market that the National association of the U.S. retailers will publish on November 13 will speak for a further deterioration of the situation on housing market. According to the forecast of experts, the number of incomplete deals on purchase of secondary housing decreased in September by 2.5% - down to another record. A month earlier this indicator fell by 6.5%. Increase in rates of loans and toughening of mortgage terms let expect recession on the U.S. housing market in 2008 as well, the economists note. Consumer prices (CPI index), as it is expected, grew in October straight second month by 0.3%. According to the forecast, prices without an account for food and energy carrier (CPI Core index) increased by 0.2%. In September these indexes also grew by 0.3% and 0.2% respectively. Ministry of labor will publish the data about the level of consumer prices in the U.S. in October on November 15 at 4:30 p.m. of Moscow time. A day earlier, also at 4:30 p.m. of Moscow time the information of the prices of manufacturers in the country during the last month will be promulgated. According to the forecast, this indicator will grow in October by 0.3% after 1.1% increase a month earlier. Growth rate of industrial production totaled 01%, as expected, having remained on the level of September. FRS will publish these data on November 16 at 5:15 of Moscow time. As experts note, the low level of industrial production in the U.S. means that problems of housing market spread on other fields of economy of the country. At the same time, weakening of dollar and acceleration of the pace of economical growth beyond the U.S. contribute to the conservation of demand on the goods of local companies abroad and will hold the level of industrial production from falling, the analysts think. [2007-11-12]