In our news wrap Friday, British officials demanded an investigation of an incident that brought Europe’s busiest airport to a standstill. Also, the Pew Research Center found that the wealth gap between white Americans and minorities is growing.
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Wall Street sank into a week-ending swoon today, overwhelmed again by the plunging price of oil. In New York trading, oil fell below $58 a barrel, down 12 percent just this week. In turn, the Dow Jones industrial average slumped 315 points to close below 17,281, its worst week in three years. The S&P 500 dropped 33 points to close at 2,002, its worst week in well over two years. The Nasdaq fell 54 to close at 4,653.
Financial expert Hugh Johnson says it underscores that lower oil prices present a trade-off.
HUGH JOHNSON, Chairman and Chief Investment Officer, Johnson Illington Advisors:
A decline in the price of gas at the pump is going to free up a lot of money for consumption in the U.S. That’s good news. We see it show up in an increase in consumer confidence. We see it show up in an increase in November retail sales. So there’s a trade-off
But, believe me, the decline in the price of oil does reflect a decline or a slowdown in the global economy. That’s a worry and that’s not going away any time soon.
Stocks were also hurt today by fresh concerns over economic growth in China.
A new look at how the economic recovery is affecting individual Americans finds a growing wealth gap between whites and minorities in the U.S. The Pew Research Center reported today that, in 2010, white households had a net worth eight times greater than black households. By last year, it had grown to 13 times greater. The gap between whites and Hispanics is slightly less, but still the largest it’s been since 2001.
The Senate moved this evening to consider a giant spending bill that funds most of the government through September. It scraped through the House last night, after President Obama lobbied Democrats for support. Many were angered by provisions that weaken rules on financial derivatives, and let wealthy donors pour more money into political parties.
Today, the president argued it’s the best deal available.
PRESIDENT BARACK OBAMA:
This, by definition, was a compromise bill. This is what’s produced when you have the divided government that the American people voted for.
Had I been able to draft my own legislation and get it passed without any Republican votes, I suspect it’d be slightly different. That is not the circumstance we find ourselves in.
While the Senate works, the House passed another short-term extension of government funding through next Wednesday.
A major Pacific storm lashed Southern California today after roaring across the northern part of the state. Downpours of two inches an hour triggered floods, downed trees, and cut power to some 80,000 customers. The rain also set off a mudslide in Camarillo Springs, north of Los Angeles, where hillsides had been stripped bare by wildfires; 124 homes were ordered to evacuate, as debris was piled up to the rooftops in some places.
BILL GOLUBICS, California:
I came out on my little front porch here to see how much water might be going down the street. Then, after about five minutes, the door slammed shut behind me, and I knew what had happened, that the mud had entered the house and was up against the door from the inside. So there I was kind of stuck on the front porch. And soon the mud was flowing around both sides of the house, going into the street, and I knew I was — I was in trouble at that point.
Officials say the powerful storm is not nearly enough to end California’s record drought.
British officials demanded an investigation today, after a computer failure shut down airspace over London for a time. The incident brought Heathrow Airport, Europe’s busiest, to a standstill. In turn, hundreds of flights had to be canceled or delayed. The U.S. Federal Aviation Administration said the disruption didn’t delay any flights departing from the U.S. for Britain.
The people of Japan prepared today to go the polls for nationwide parliamentary elections. Prime Minister Shinzo Abe has called Sunday’s vote in a bid for fresh support for efforts to rejuvenate a faltering economy. His party’s victory is all but guaranteed. This will be Japan’s third national election since the end of 2012.
And new research today underscored the health costs of osteoporosis in older women. The National Osteoporosis Foundation reported that the bone-weakening disease leads to more hospitalization and greater health costs than heart attack, breast cancer or stroke. The study looked at American women over the age of 55.