The Jamaican stock exchange plunged another 1,144 points on Friday, but the 1.2 per cent loss was not enough to erase all the gains made over the course of last week.

All three indices declined Friday but ended up for the week, with the market now valued at $706.5 billion.

The main JSE index gained 783 points or 0.8 per cent to close at 94,727, but when dissected, it was the All-Jamaican Composite and the blue chip JSE Select indices that proved to be the real saviours of the market.

The composite gained 4,419 points or 4.97 per cent to close the week at 93,316 points, while the blue chip closed up 138 points, advancing 5.75 per cent to 2,539 points.

recession

The Kingston exchange moved in the same direction as the United States market Friday where new economic data dragged down the Dow.

The US is on track to build fewer homes this year than at any time since the end of World War II, adding to the woes of an economy that analysts said Friday has almost certainly entered a recession.

While the economic outlook darkened even further with bad reports on layoffs and consumer confidence, it was one of the quietest days since the financial meltdown began a month ago.

Wall Streets tumultuous week turned out to be its best in five years.

record jump

The Dow Jones industrial average lost 127 points Friday but turned in the strong week because of two huge days of gains a record 936-point jump on Monday and an increase of 401 points Thursday.

Friday was still marked by the huge swings that have become typical lately. At various points the Dow was up nearly 300 points and down nearly 250, and it finished with a triple-digit move for the 22nd time in 25 trading sessions.

A monthly survey by the National Association of Home Builders showed sentiment among home builders hit a record low in early October.

David Seiders, chief economist for the group, said builders are being hit by a double whammy from the financial turmoil: It is harder for them to get loans to pursue new houses, and more difficult to sell those they do build.

He forecast that builders will keep slashing production in coming months, with construction starts for new homes and apartments totalling just 936,000 this year, the lowest level since 1945.

“The builders are telling us that the financial crisis is really hurting because people justifiably have no idea where things are going,” Seiders said.

Before the markets opened, President Bush went to the headquarters of the US Chamber of Commerce to say that the US$700 billion financial rescue package was “big enough and bold enough to work”.

recession

But he cautioned that it would take time to unlock credit markets. And analysts said new data released Friday showed it is probably too late for the economy to avoid a recession.

Many analysts said they now had recessions in their forecasts, believing that the overall economy, as measured by total domestic production, probably shrank in the July-to-September quarter, dragged lower in part by the continued plunge in housing.

“I don’t think there is any ambiguity with respect to whether we are in a recession,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think it actually started at the end of last year, and because of the financial panic we are going through now, it is likely to last another year.”

– Gleaner and AP reports