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post #1 of 26 (permalink) Old 10-10-2008, 12:26 PM Thread Starter
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Dow down 527 as stocks extend devastating decline

Dow down 527 as stocks extend devastating decline

By TIM PARADIS, AP Business Writer
4 minutes ago



Wall Street extended its devastating decline Friday as investors, still seeing no resolution to the credit crisis, sold frantically and propelled the Dow Jones industrials to their eighth straight day of losses and worst week ever. Stocks gyrated in the opening minutes as a burst of buying in financial stocks spread to other sectors, but all the major indexes were down more than 5 percent by midafternoon.

The hair-trigger mentality of the market was evident from the opening bell. The Dow was down nearly 700 points in the first 15 minutes, recovered to an advance of more than 100 before the first hour was over, then turned sharply lower again. Investors were nervously awaiting the last hour of trading, which has tended to see the heaviest selling over the past week of tremendous losses.

Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow to drop 21 percent in just 10 trading days. The blue chip index tumbled 678 points Thursday, and is heading to its worst weekly point and percentage drop since being created 112 years ago.

The major indexes had sharp swings throughout the day, likely exacerbated by the computer-driven "buy" and "sell" orders that kicked in when prices fell far enough to make some stocks look like attractive bets or make investors want to exit the market. The spurts of buying didn't reflect an easing of the market's despair, and so the heavy selling continued.

"Fear has been running rampant all over the Street. Fear and greed, that's what rules the Street. I think the carcass has been stripped to the bone," said Dave Henderson, a floor trader on the New York Stock Exchange for Raven Securities Corp.

Many investors have waited until the final hour of trading each day this week to hit the "sell" button, so investors appeared uneasy about how the market would look at 4 p.m., when the closing bell sounds. The selling can intensify as mutual funds and hedge funds are forced to raise cash to meet investors' "sell" orders and as nervous investors otherwise shy from placing bets in such a jittery market.

At the start of Friday's session, losses for the year totaled a staggering $8.3 trillion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing nearly all stocks traded in the U.S.

In midafternoon trading, the Dow fell 526.95, or 6.14 percent, to 8,052.24. At its low point Friday, the Dow was down 696 points at 7,882.51, just 60 points above its low in Wall Street's last bear market, 7,286.27, reached Oct. 9, 2002.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 62.58, or 6.88 percent, to 847.34, while the Nasdaq composite index fell 96.04, or 5.84 percent, 1,549.08.

The Dow, which began the session down 16.9 percent, was on track for its worst weekly decline ever. Previously, the worst performance came in the week ended July 21, 1933, when the blue chips fell 16 percent.

Through Thursday, the Dow lost 2,271 points, suffering its worst seven-day point drop. Its percentage decline of 20.9 percent over that stretch is the largest since the seven-day plunge ending Oct. 26, 1987, when the Dow lost 23.8 percent. That sell-off included Black Monday, the Oct. 19, 1987 market crash that saw the Dow fall 22.6 percent in a single day.

By comparison, during the first week of trading after the Sept. 11, 2001, terror attacks, the Dow lost 1,369.70, or 14.26 percent. But during the eight trading days following the attack, the decline came to 1,038.12, or 10.8 percent, as buyers returned to the market at the end of that stretch.

The Dow and S&P 500 reached their all-time highs a year ago, on Oct. 9, 2007. Through Thursday, the Dow has lost 5,585 points, or 39.4 percent, since closing at its record of 14,164.53, while the S&P 500 index, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

Meanwhile, the value of all the shares in the U.S. stock market has plunged $8.33 trillion since last year's high. That's based on figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks and represents almost all stocks traded in the country.

On Friday, about 200 stocks advanced while about 3,000 declined on the New York Stock Exchange, where volume came to a heavy 1.08 billion shares.

Investors continue to shift money into safer investments, most of it going into the government bond market. The yield on the three-month Treasury bill plunged to 0.19 percent from 0.58 percent late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.

Longer-term Treasury yields moved higher as investors moved into shorter term issues. The yield on the benchmark 10-year note rose to 3.86 percent from 3.76 percent late Thursday.

Gold prices fell $5.44 to $832.10 an ounce on the New York Mercantile Exchange, while oil prices fell. A barrel of light, sweet crude declined $8.73 to $77.86 a barrel on the Nymex.

AP Business Writers Joe Bel Bruno and Dan Strumpf in New York contributed to this report.
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post #2 of 26 (permalink) Old 10-10-2008, 12:30 PM Thread Starter
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Snowballing sell-off spreads worldwide

By TIM PARADIS and MARTIN CRUTSINGER, AP Business Writers
2 hours, 1 minute ago


Stock prices careened lower Friday in Asia and Europe and gyrated wildly in the United States, extending a stampede of selling that began on Wall Street a day earlier and deepening a global financial crisis that has defied all efforts to stop it.

President Bush tried to reassure Americans afraid for their life savings and their jobs. "Anxiety can feed anxiety," Bush said Friday, "and that can make it hard to see all that is being done to solve the problem."

This week's coordinated interest rate cuts by the world's central banks to thaw frozen credit markets and boost investor confidence have fallen flat as markets remain gripped by fears about the scale and depth of the likely global recession.

Stock prices were swinging sharply on Wall Street. The Dow Jones industrials fell nearly 700 points soon after trading began, regained all of that deficit temporarily — then slid to a loss of more than 300 points shortly after Bush's remarks.

The Wall Street Journal reported that government officials are considering temporarily guaranteeing all U.S. bank deposits and billions of dollars of bank debt, in addition to possibly buying stakes in individual banks. The New York Times also said officials are reviewing a British proposal that also includes repayment guarantees for certain types of loans.

Administration officials told The Associated Press that several financial rescue plans are being reviewed, but no announcements are likely before finance ministers from the seven biggest industrial nations meet Friday in Washington.

"The world is sending an unmistakable signal: We're in this together, and we'll come through this together," Bush said of the international planning.

The $700 billion federal bailout legislation enacted on Oct. 3 cleared the way for the government insurance limit for bank deposits to be temporarily raised from $100,000 to $250,000 in cases where bank or savings and loans fail. That guarantee covered $5.2 trillion of deposits, but another $1.8 trillion is not presently covered, according to the Wall Street Journal.

But a Treasury Department official, who spoke on condition of anonymity because of the sensitive nature of market conditions, said covering all deposits is not now being considered. "We raised the limit one week ago and have no plans to remove the limit," the official said.

A spokesman for the Federal Deposit Insurance Corp., however, didn't appear to rule out the possibility that such a plan might be considered.

The Treasury had earlier requested from Congress authority for the FDIC to change deposit insurance limits to respond to disruptions in the banking system, in addition to the increase to $250,000 that was part of the bailout legislation, FDIC spokesman Andrew Gray noted in a statement.

"We believe that we have significant latitude, in consultation with Congress, under the systemic risk exception — which carries the threshold of approval of the Federal Reserve and Treasury Secretary in consultation with the president — to protect depositors and adopt other measures to support the banking system," Gray said.

Thursday's anniversary of the U.S. stock market peak turned into one of the worst days in Wall Street history, with the Dow Jones industrials loosing a breathtaking 679 points, or 7.3 percent.

Asian markets followed Wall Street's cue, as key market gauges dropped 9.6 percent in Japan, 8 percent in India and 7.2 percent in Hong Kong. European stocks slumped by midday with key market barometers losing 7.3 percent in London, 7.7 percent in Germany and 7.5 percent in Paris.

A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and the rout in Australian markets caused traders to call it "Black Friday."

"Overall it's the fact that despite the huge firefighting efforts of central banks worldwide we still haven't seen any thawing of interbank lending that is going to be causing the most concern now," said Matt Buckled, a dealer at CMC Markets in London.

The late burst of selling Thursday on Wall Street sent the Dow Jones industrials down to 8,579, crashing through the 9,000 level for the first time in five years and wiping out $872 billion of investment value.

As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.

"Right now the market is just panicked," said David Wyss, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."

Thursday's sell-off on Wall Street took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.

Paper losses for the year though Thursday add up to an staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wiltshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.

It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.

Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis — considering seeking an equity stake in major U.S. banks in order to stabilize them.

But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.

Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.

"In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can," said Sung Won Sohn, an economics professor at California State University, Channel Islands.

Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday's sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.

Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 — its lowest level since the Korean War began more than a half century ago.

For the Dow, it has been nothing short of a free fall:

_The point decline Thursday was the third-worst in Dow history. The worst, 778 points, came less than two weeks ago.

_Of the last 19 trading days, there have been 11 triple-digit losses — including the unprecedented six straight. The six gains have all been triple-digits, and only one of them was enough to make up the losses of the day before.

In percentage terms, Thursday's drop in the Dow exceeded the day the markets reopened after the Sept. 11, 2001, terrorist attacks. It was not close to the 22.6-percent decline on Black Monday in 1987, the last stock market crash.

AP Economics Writer Martin Crutsinger reported from Washington. Associated Press writers Tom Raum in Washington and Patrick Rizzo in New York contributed to this story.

Copyright © 2008 The Associated Press.
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post #3 of 26 (permalink) Old 10-10-2008, 12:37 PM
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George Bush, handed a budget surplus and the good will of the entire planet following 9-11, leaves the world he inherited in tatters, a world of war and financial ruin. Après moi, le déluge.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #4 of 26 (permalink) Old 10-10-2008, 12:45 PM
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^True, he has sadly been almost as bad as I thought. I still think he has one more devastatingly idiotic blow to throw though. How a first world nation could have elected him I do not know. You really do get the gov't you deserve. Ouch.
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post #5 of 26 (permalink) Old 10-10-2008, 12:56 PM Thread Starter
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^True, he has sadly been almost as bad as I thought. I still think he has one more devastatingly idiotic blow to throw though. How a first world nation could have elected him I do not know. You really do get the gov't you deserve. Ouch.
Sadly, this may apply to the upcoming Government as well, whether Democratic, or Republican.
The present system obviously isn't working too well, but few seem to notice.
Power to the sheeple.
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post #6 of 26 (permalink) Old 10-10-2008, 01:08 PM
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The US is crippled by our lack of proportional representation. The winner-take-all nature of our government is turning us into a nation of jackals, and puts the nation up for sale every election. Each congressional district should have a slate of candidates as they do in the rest of the world, apportioned by vote percentage. The current results of our elections always leave the losers voiceless and unrepresented in our democracy. All campaigns for office should be publically financed, with facilities such as CSPAN open to all qualified candidates to present their positions, with a ban placed on the use of commericial advertisements as a way to further a candidate's run for office - they should stand equally in some forum where the voters can hear their ideas instead of their shrill screaming at each other. It is that above all else that is at the root of our problems. Financial Titans have no country, they are global capitalists, and giving them the right to have power in our democracy by buying our representatives thru contributions HAS GOT TO END.

I also think we need a return to the Fairness Doctrine, to end this era of a small group of right wing nut jobs with a media microphone financed by the corporate interests keeping the entire nation in a state of constant uproar. We need reasoned debate by reasonable people. The public owns the airwaves, they have a right to hear all sides. Instead we are barraged with a constant shit storm of right-wing propaganda. We need truth, not spin, and the only way to find it is to hear both sides and find the place in the middle where truth resides.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address

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post #7 of 26 (permalink) Old 10-10-2008, 01:17 PM Thread Starter
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Not that there is no corruption, but that is similar on German election financing.
Large corporate contributions are simply illegal.
IMO, the US is in dire need of a viable third party.
None of the present players deserve anyone's vote.
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post #8 of 26 (permalink) Old 10-10-2008, 01:42 PM
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Originally Posted by Shane View Post
^True, he has sadly been almost as bad as I thought. I still think he has one more devastatingly idiotic blow to throw though. How a first world nation could have elected him I do not know. You really do get the gov't you deserve. Ouch.
Martial Law or Iran?

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #9 of 26 (permalink) Old 10-10-2008, 01:42 PM
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I can't look at my 401k anymore, somebody hold me...
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post #10 of 26 (permalink) Old 10-10-2008, 01:55 PM
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Walk away from the windows.

Really, it can't be that bad. Turn on the TV and see how the rest of the third world lives, get a good glimpse. Learn their survival tactics and you will be OK. Just forget about your house, cars, bank account. No not true, forget about electricity, running water and other creature of comforts.

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