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Archive for Saturday, October 25, 2008

Stocks plunge on global recession fears

October 25, 2008

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— Wall Street joined stock markets around the world in a huge selloff Friday, sending major market indexes to their lowest levels in more than five years on the belief that a punishing economic recession is at hand. A grim outlook from electronics maker Sony helped trigger the selling, and another bleak forecast from the automaker Daimler added momentum to the drop.

U.S. trading was dramatic and fractious, with the Dow Jones industrials falling more than 500 points soon after the opening bell. The blue chips followed the pattern of recent sessions, recovering ground only to fall sharply again, before ending the day with a loss of 312. All the major indexes fell more than 3 percent.

The pullback on Wall Street, while steep, wasn't as bad as some observers had feared after stocks plunged overseas in response to another round of grim corporate news. Sony's profit warning sent its shares tumbling in Japan and offered only the latest example that companies are girding for a slowing economy and a pullback among consumers worried about falling home prices and losses on their investments.

And in Germany, Daimler's stock fell sharply after the company reported lower third-quarter earnings and abandoned its 2008 profit and revenue forecast.

"People have been saying that we're in a recession. This is the realization," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

It is clear that many investors are convinced the world economy is headed for a severe downturn even as governments have raced to revive credit markets on the hope that a return of more normal lending levels by banks and other financial houses will fan economic activity.

But some say the recent pullbacks have been set off by forced selling, keeping some bargain-seeking traders from entering the market.

"There's nothing new going on," said Scott Bleier, president of market advisory service CreateCapital.com. "This is all about the unwinding of massive leverage."

Investors were nervous going into the session after U.S. stock futures - the bets traders place on where the market will go - fell so sharply before Friday's opening bell that selling halts were imposed.

By the close, the Dow fell 312.30, or 3.59 percent, to 8,378.95. Friday's finish was the lowest for the Dow since April 25, 2003, when it ended at 8,306.35.

Friday was the 79th anniversary of the day that, according to many market historians, the October 1929 stock market crash began.

Comments

bondmen 6 years, 1 month ago

Stocks plunge on global recession fears and big possibility Obama will be elected as America's first communist president.Is it any wonder folks who own stocks are selling them when Obama pledges to increase taxes on their assets?The Democrats have a plan to confiscate what remains of the 410K's people have saved in for retirement and make them add it to the failing Social (in)Security boondoggle! Oh but they promise a 3% annual return on the confiscated funds!

seriouscat 6 years, 1 month ago

And in other news, people like bondmen are buying tin-foil hats like they're GOING OUT OF STYLE!

Mixolydian 6 years, 1 month ago

It's a simple question...is this country better off now than it was 2 years ago? Before the democratic control of congress, were our:Home values higher?Retirement accounts higher?Unemployement rates lower?National debt lower?Savings accounts higher?Stock market higher?Confidence in our future and economy higher?Will it get better with an inexeperienced rubber stamp democrat president?Will a totally unchecked, unbridled democrat controlled government be better?

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