Dow's Record Was Year Ago Today
...The Dow is now 35% below its record finish a year ago, on Oct. 9, 2007. It has fallen 15% over the past six trading days.
The inability to rebound after rate cuts by Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada and other central banks was taken as a sign that it will be hard for stocks to recover from their declines of the past year.
"The attitude today is sort of like the one people have when they call an ambulance," said Art Hogan, chief market strategist at Jefferies & Co. "When the ambulance gets there on time," they are relieved. "Then they stop and think ... right, we need an ambulance."
The broad Standard & Poor's 500-stock index fell 1.1% to 984.94, its lowest close since August 2003 and 37% below its record last October. The financial sector bore the brunt of the late-day selling. It was up heading into the final half-hour of trading but ended down 4%.
Despite the rate cuts and other government moves to address problems in financial markets, "economic news is likely to get worse before it gets better," said Russ Koesterich, chief investment strategist at Barclays Global Investors. "When you address one problem, another one pops up."
Crude oil and other commodities traded lower amid worries about slowing demand due to the weak global economy. Crude futures were off 1.2% at $88.95 a barrel in New York, 39% below the record set July 3.
Extreme intraday volatility in the stock market has been scaring away buyers, traders say. Many point to the Securities and Exchange Commission's ban on short selling of financial stocks -- bets made with borrowed stock that prices will decline -- as one reason for the big swings.
The SEC's move not only took sellers out of the market, traders say, but also buyers who would hedge positions in stocks they own by shorting other stocks. In addition, hedge funds that normally would buy shares as prices fell in order to replace borrowed stock and take profits have been letting those short positions ride because they can't make new bets.
That ban was due to expire at midnight Wednesday and traders will be watching the impact on the market. ...
Today's Markets - WSJ.com