Post by unlawflcombatnt on Jan 18, 2008 0:59:20 GMT -6
from Yahoo News:
Stocks extend plunge; Dow falls -306 points
By TIM PARADIS
Jan 17, 2008
"Wall Street extended its 2008 plunge Thursday, sending the Dow Jones industrials down -306 points and to their lowest level since last March after a regional Federal Reserve report showed a sharp and unexpected decline in manufacturing activity. Downgrades of key bond insurance companies added to the market's black mood, with investors fearing an escalation of months of credit market problems.
The Dow lost nearly 2.5%...its worst 3-day percentage decline since October 2002. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3% Thursday.
The Dow, S&P 500 and the Nasdaq composite index have now given back all of the gains they achieved in 2007.
Stocks opened higher but quickly gave up their gains after the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9 from a revised reading of negative 1.6 in December. The latest number came in well short of what Wall Street had been expecting and underscored the seriousness of the economic worries that have gripped both Wall Street and Washington in recent weeks.
Credit concerns also dogged Wall Street after rating agency Moody's Investors Service placed bond insurer Ambac Assurance Corp. on review for a possible downgrade. That possibility alarmed investors because it would place all bonds insured by Ambac on review as well. Wall Street are concerned that bond insurers would be unable to absorb a spike in claims.
Investors' fears of a slowing economy, the consequence of a months-long housing and credit market crisis, dominated trading, as they have since the start of the year.
"The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession.
"It's not rocket science — the economy is slowing dramatically, and it's being reflected in economic reports."
The Dow...closed down -306.95, or -2.46 percent, at 12,159.21.
The Dow is now off -8.33% for the year;...the index's frequent triple-digit losses have now forced it to give back its 2007 gains. The Dow had its lowest close since it ended the March 16, 2007, session at 12,110.41....
The S&P 500 index lost...-2.91%, closing at 1,333.25, and leaving it was a year-to-date loss of -9.2%, while the Nasdaq dropped...-1.99% to 2,346.90, giving it a 2008 deficit of -11.51%.
Thursday brought the lowest close for the S&P 500 since October 2006.... and the worst for the Nasdaq since March of last year.
Declining issues outnumbered advancers by more than 5 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 5.41 billion shares compared with 5.25 billion traded Wednesday.
Bond prices rose as stocks fell....The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.63%t from 3.68% late Wednesday....
The Philadelphia manufacturing reading caught Wall Street by surprise — igniting fears that the economy is slowing precipitously and that policymakers might be too late in contemplating aid.
Economists had expected the Philadelphia index would come in at a -1.5....Instead, the -20.9 figure was the weakest since October 2001....
Jim Herrick, manager of equity trading at Baird & Co., contends that the Philadelphia Fed reading and other recent negative economic reports indicate the economy is likely in a downturn....
Housing starts plunged -14% to 1.01 million in December, marking the weakest pace of home building in more than 16 years. In addition, permits to build new homes dropped -8% last month to 1.07 million, the lowest level since 1993....
The economic concerns come in a week in which some of Wall Street's biggest names have posted huge losses following bad bets on mortgage investments. Financial shares fell sharply Thursday after the reports have made clear that there is also increasing weakness in home equity and other consumer banking operations.
Merrill Lynch & Co. on Thursday posted a massive loss that underscored the depth of the economy's credit problems. The world's largest brokerage said it lost $9.91 billion in the 4th quarter, hurt by big write-downs from investments and trades battered by tight credit conditions.
Merrill fell...-10% to $49.45....
The Russell 2000 index of smaller companies fell...-2.76%....
Stocks extend plunge; Dow falls -306 points
By TIM PARADIS
Jan 17, 2008
"Wall Street extended its 2008 plunge Thursday, sending the Dow Jones industrials down -306 points and to their lowest level since last March after a regional Federal Reserve report showed a sharp and unexpected decline in manufacturing activity. Downgrades of key bond insurance companies added to the market's black mood, with investors fearing an escalation of months of credit market problems.
The Dow lost nearly 2.5%...its worst 3-day percentage decline since October 2002. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3% Thursday.
The Dow, S&P 500 and the Nasdaq composite index have now given back all of the gains they achieved in 2007.
Stocks opened higher but quickly gave up their gains after the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9 from a revised reading of negative 1.6 in December. The latest number came in well short of what Wall Street had been expecting and underscored the seriousness of the economic worries that have gripped both Wall Street and Washington in recent weeks.
Credit concerns also dogged Wall Street after rating agency Moody's Investors Service placed bond insurer Ambac Assurance Corp. on review for a possible downgrade. That possibility alarmed investors because it would place all bonds insured by Ambac on review as well. Wall Street are concerned that bond insurers would be unable to absorb a spike in claims.
Investors' fears of a slowing economy, the consequence of a months-long housing and credit market crisis, dominated trading, as they have since the start of the year.
"The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession.
"It's not rocket science — the economy is slowing dramatically, and it's being reflected in economic reports."
The Dow...closed down -306.95, or -2.46 percent, at 12,159.21.
The Dow is now off -8.33% for the year;...the index's frequent triple-digit losses have now forced it to give back its 2007 gains. The Dow had its lowest close since it ended the March 16, 2007, session at 12,110.41....
The S&P 500 index lost...-2.91%, closing at 1,333.25, and leaving it was a year-to-date loss of -9.2%, while the Nasdaq dropped...-1.99% to 2,346.90, giving it a 2008 deficit of -11.51%.
Thursday brought the lowest close for the S&P 500 since October 2006.... and the worst for the Nasdaq since March of last year.
Declining issues outnumbered advancers by more than 5 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 5.41 billion shares compared with 5.25 billion traded Wednesday.
Bond prices rose as stocks fell....The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.63%t from 3.68% late Wednesday....
The Philadelphia manufacturing reading caught Wall Street by surprise — igniting fears that the economy is slowing precipitously and that policymakers might be too late in contemplating aid.
Economists had expected the Philadelphia index would come in at a -1.5....Instead, the -20.9 figure was the weakest since October 2001....
Jim Herrick, manager of equity trading at Baird & Co., contends that the Philadelphia Fed reading and other recent negative economic reports indicate the economy is likely in a downturn....
Housing starts plunged -14% to 1.01 million in December, marking the weakest pace of home building in more than 16 years. In addition, permits to build new homes dropped -8% last month to 1.07 million, the lowest level since 1993....
The economic concerns come in a week in which some of Wall Street's biggest names have posted huge losses following bad bets on mortgage investments. Financial shares fell sharply Thursday after the reports have made clear that there is also increasing weakness in home equity and other consumer banking operations.
Merrill Lynch & Co. on Thursday posted a massive loss that underscored the depth of the economy's credit problems. The world's largest brokerage said it lost $9.91 billion in the 4th quarter, hurt by big write-downs from investments and trades battered by tight credit conditions.
Merrill fell...-10% to $49.45....
The Russell 2000 index of smaller companies fell...-2.76%....