Wall Street Meltdown: U.S. Stocks Plunge, Sending S&P to Lowest Level Since 1997

Nov. 20 (Bloomberg) — U.S. stocks slid and the Standard & Poor’s 500 Index plunged to its lowest level in 11 years after economic reports depicted a deepening recession and lawmakers postponed a vote on a plan to salvage the auto industry.

The Standard & Poor’s 500 Index extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history. Chesapeake Energy Corp. and National-Oilwell Varco Inc. slid more than 21 percent after oil sank to a three-year low as the slumping economy crushes demand. JPMorgan Chase & Co. lost 18 percent and Citigroup Inc. plunged 26 percent as concern the recession will trigger more bankruptcies pushed the cost of insurance against corporate defaults to an all-time high.

“We’re just trying to stay away from the window,” said James Paulsen, who helps oversee about $220 billion as chief investment strategist at Wells Capital Management Inc. in Minneapolis. “This isn’t about fundamentals, it’s not about bad balance sheets, it’s about fear and confidence.”

The S&P 500 slid 6.7 percent to 752.44, under the low of 776.76 reached during the bear market in 2002. The Dow Jones Industrial Average sank 443.99 points, or 5.6 percent, to 7,552.29. The Nasdaq Composite decreased 5.1 percent to 1,316.12. Twelve stocks retreated for each that rose on the New York Stock Exchange.

The S&P 500 extended its plunge from an October 2007 record to almost 52 percent in the worst bear market since the Great Depression. Concern the recession is worsening was spurred after jobless claims approached the highest level since 1982, the index of leading economic indicators fell for a third time in four months and the Federal Reserve said manufacturing in the Philadelphia area shrank at the fastest pace in 18 years.

Seventeen companies in the S&P 500 lost more than one-fifth of their market value today, as all 10 of the index’s main industry groups slid at least 3.5 percent.

More than 2.2 billion shares changed hands on the floor of the NYSE, its busiest trading session since Oct. 10.

Europe’s benchmark index slumped 3.6 percent, while Asia’s sank 5.1 percent. Both declined to the lowest levels in more than five years. The MSCI Emerging Markets Index of developing markets lost 5.4 percent.

— Editors: Michael Regan, Nick Baker

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: November 20, 2008 16:25 EST
By Eric Martin

Source: Bloomberg

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