We got plunging. In the post below we have plummeting. It looks like the headline writers skipped right past fall, tumble, sink and dive.
Commodities plunged the most in almost six weeks, as oil, gold and corn fell from record highs on renewed concern that a slowing U.S. economy will curb demand for raw materials.
The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts fell 30.3821, or 2 percent, to 1,506.93 at 2:48 p.m. in New York. A close at that level would be the biggest decline since Jan. 23, halting a rally that sent the index up 20 percent this year and to a record high on Feb. 29.
Demand for everything from gasoline to copper to food may slow as inflation accelerates, loan defaults rise and the U.S. housing market deteriorates, said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``Further declines in house prices are likely,'' Federal Reserve Chairman Ben S. Bernanke said today.
``If the U.S. continues to slow, it's not going to bode well for the supply and demand picture of these commodities,'' O'Neill said. ``Every time Bernanke speaks, the negativity about the U.S. economy comes forward.''
Bernanke, in a speech to bankers in Orlando, Florida, urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting. U.S. growth has been stifled, slowing to 0.6 percent in the fourth-quarter, as the subprime mortgage fallout triggered about $181 billion in writedowns and credit losses at the world's largest financial firms.
Commodities have surged this year, beating gains in stocks and bonds, as a slumping dollar and lower interest rates sparked demand for a hedge against inflation. U.S. consumer prices rose 4.1 percent last year, the fastest pace since 1990. The Fed has cut interest rates five times since September to avoid a recession, and speculators say more reductions are likely....MORE