Wall Street: Fall to 12 years low
Filed Under (Market News) by Webmaster on 06-03-2009
Tagged Under : AIG, Nasdaq, wall street
Nasdaq ends at a 6-year low, and Dow and S&P 500 fall to fresh 12-year lows as investors fret about GM, Citigroup and the global economy. Stocks plunged to fresh 12-year lows Thursday as investors waded through more grim news: GM said its survival is in doubt, bank shares took a beating, and Citigroup fell below a buck. Adding to the global woes: China defied expectations by failing to boost its economic stimulus program.
Stocks managed to snap back from 12-year lows Wednesday on hopes that China would announce that it was increasing the size of its stimulus plan. But the Chinese premier did not announce any boost to the $586 billion plan at a key political meeting in Beijing Thursday.
Stocks have been sliding on and off since peaking in October 2007 amid the housing and credit market collapse and the onset of the recession – which technically began in December 2007. But the declines have picked up the pace year-to-date in response to growing pessimism about the economy. As of Thursday’s close, the Dow is down almost 25% this year, the worst start in the 113-year history of the Dow. Since closing at a record 14,164.53 on Oct. 9, 2007, the Dow has fallen 53% as of Thursday’s close. Since closing at a record 1,565.15 on Oct. 9, 2007, the S&P 500 has fallen 56% as of Thursday’s close.
Since hitting a bull-market high of 2,859.12 on Oct. 31, 2007, the Nasdaq has tumbled 54.5% as of Thursday’s close. But the Nasdaq has never come near its record of 5,048.62 hit on March 10, 2000, at the apex of the Internet boom.
The Dow Jones industrial average (INDU) fell 281 points, or 4.1%, to close at 6,594.44, ending at the lowest point since April 15, 1997. The Dow has now fallen 14 of the last 18 sessions. The Nasdaq composite (COMP) fell 54 points, or 4% to close at 1,299.59, ending at the lowest point since 1279.24 on March 12, 2003, at the bottom of the previous bear market. The S&P 500 (SPX) index lost 30 points, or 4.2%, closing at 682.55, the lowest finish since Sept. 18, 1996.
Stocks slipped at the open and kept falling from there, with the selling accelerating as the major gauges failed to hang on to key technical levels that traders watch. “Once we broke through that 700 level on the S&P, which has been intact since 1996, all the people who were watching it left the building,” said Joe Clark, market analyst at Financial Enhancement Group.
He said that with the major gauges at these levels, market pros have even less of a sense of where the so-called bottom is.
Among the big losers, financials were hit especially hard. Bank of America, Citigroup, Wells Fargo and Morgan Stanley were among the losers. The KBW Bank (BKX) index lost 11.8%. Citigroup fell for a time below $1 a share, to its lowest level ever at 97 cents, before ending at $1.02. More on Citi from CNNRadio. JPMorgan Chase tumbled 14% after Moody’s lowered its long-term outlook on the company to “negative” from “stable” late Wednesday.
Failed insurance giant AIG slumped 18.6% as U.S. regulators discussed the company’s $180 billion bailout in a Senate hearing.
“It’s the same old story, with the financial sector continuing to hammer the market,” said Steven Goldman, market strategist at Weeden & Co. “Everybody is so bearish right now that you would expect to be in the midst of a counter-trend rally,” he said. “But the implosion in the banking and insurance sectors is just overwhelming.” – CNN
