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.”

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

Dow falls below 8,000, S&P at 5-year low

NEW YORK – Wall Street hit levels not seen since 2003 on Wednesday, with the Dow Jones industrial average plunging below the 8,000 mark amid a dour economic outlook from the Federal Reserve and worries over the fate of Detroit’s three automakers.

A cascade of selling occurred in the final minutes of the session as investors yanked money out of the market. For many, the real fear is that the recession might be even more protracted if Capitol Hill is unable to bail out the troubled auto industry.

Investors also scoured economic data that included minutes from the last meeting of the Federal Reserve in which policymakers lowered projections for economic activity this year and next. Economic worries caused across-the-board selling, with financial stocks particularly hard hit.

The S&P 500, widely considered the broadest snapshot of corporate America, slipped 52.54 points, or 6.12 percent, to 806.58; and the Dow gave up 427.47 points, or 5.07 percent, to 7,997.28. Both closed at their lowest levels since March 2003, and are rapidly approaching the lows of the 2000 to 2002 bear market.

The financial crisis has already wiped out $6.69 trillion of value from the S&P 500 since its October 2007 high, and many fear more is to come. Stocks have traded with high volatility in the past few months, with the major indexes soaring only to plunge an hour later as the market searches for a bottom.

Read moreDow falls below 8,000, S&P at 5-year low

U.S. Stocks Post Biggest Post-Election Drop on Economic Concern


Traders work on the floor of the New York Stock Exchange in New York, Nov. 5, 2008. Photographer: Ramin Talaie/Bloomberg News

Nov. 5 (Bloomberg) — The stock market posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.

Citigroup Inc. tumbled 14 percent and Bank of America Corp. lost 11 percent as the Standard & Poor’s 500 Index and Dow Jones Industrial Average sank more than 5 percent. Nucor Corp., the largest U.S.-based steel producer, slid 10 percent after bigger rival ArcelorMittal doubled production cuts amid slowing demand. Boeing Co., the world’s second-largest commercial planemaker, lost 6.9 percent after UBS AG forecast a 3 percent drop in global air traffic next year.

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U.S. Stocks Drop; S&P 500, Dow Post Worst Retreats Since 1937


Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks on a television above a trader in the S&P pit at the Chicago Board of Trade in Chicago, on Tuesday Oct. 7, 2008. Photographer: Joshua Lott/Bloomberg News

Oct. 7 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index below 1,000 for the first time since 2003, on speculation banks and real-estate companies are running short of money as the credit crisis worsens.

Bank of America Corp. tumbled 26 percent after cutting its dividend in half and saying it plans to sell $10 billion in common stock to brace for a recession. Morgan Stanley, KeyCorp and JPMorgan Chase & Co. slid more than 10 percent as investors shrugged off signs the Federal Reserve will reduce interest rates. General Growth Properties Inc., a mall owner, plunged 42 percent on concern it won’t be able to repay debt.

The S&P 500 slid 60.66 points, or 5.7 percent, to 996.23, extending its 2008 tumble to 32 percent in the market’s worst yearly slump since 1937. The Dow Jones Industrial Average dropped 508.39, or 5.1 percent, to 9,447.11, giving it a 29 percent retreat in 2008 that would also be the worst in 71 years. The Nasdaq Composite Index lost 5.8 percent to 1,754.88.

“We’ve approached the edge of the cliff,” Leon Cooperman, 65, who manages $6 billion at hedge fund Omega Advisors Inc., said at the Value Investing Congress in New York. “Do we go over the cliff or begin to recede? History says we recede, but there’s no guarantee. This is the most difficult financial environment I’ve lived through.”

Read moreU.S. Stocks Drop; S&P 500, Dow Post Worst Retreats Since 1937

S&P 500 plunges into a bear market

NEW YORK (Reuters) – Stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit losses hurt financial companies and Cisco Systems led technology shares lower after its CEO raised fears of an extended economic downturn.

The S&P closed 20 percent below its all-time high set in October, making it the last of the three major U.S. stock indexes to fall into a bear market. Stocks have been roiled for months by the credit crisis and a severe U.S. economic slowdown.

Related article: US: Total Crash of the Entire Financial System Expected, Say Experts

In the latest news to scare the market, Cisco’s (CSCO.O: Quote, Profile, Research, Stock Buzz) John Chambers told Reuters that customers of the company, which makes Internet infrastructure, see the economy picking up early in 2009 rather than later this year. At least two brokerages also cut their price targets on the stock.

Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) dropped sharply as some investors worried that the two pillars of the U.S. housing market will need to raise billions of dollars in additional capital through stock sales, diluting the holdings of current investors.

Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) shares fell more than 9 percent, after Fitch Ratings said it may cut the U.S. investment bank’s debt rating, given expected ongoing write-downs and diminished prospects for earnings.

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Darker Days Ahead?

Robert Reich warns a recession, or worse, could be coming.

Think the last few days have been bad for Wall Street and the rest of the world’s markets? Hang on, things are probably going to get worse, says Robert Reich, President Clinton’s former secretary of Labor and author of the recent book “Supercapitalism: The Transformation of Business, Democracy and Everyday Life.” According to Reich, who currently teaches public policy at the University of California, Berkeley, the United States might even be headed toward a depression.

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Reich: 'Now we have a mess on our hands. Bernanke has the only
       pooper-scooper in town, but it is too small for the job.'

Read moreDarker Days Ahead?