Oct 25
Oct 10
The Dow Jones industrials down nearly 700 points
NYSE No Comments »The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to an advance of more than 100 before turning sharply lower again, and the other major indexes fluctuated sharply as well.
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 drop, and one of its biggest weekly percentage drops, since being created 112 years ago.
A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and those that remained opened were hammered. The rout in Australian markets caused traders there to call it “Black Friday.”
European stocks sank, with Britain’s FTSE-100 down 8.14 percent, German’s DAX down 7.6 percent, and France’s CAC-40 down 7.7 percent. In Asia, the collapse of Japan’s Yamato Life Insurance caused already nervous investors to pull even more money out of the market - the Nikkei 225 fell 9.6 percent.
Broader stock indicators also fell. The Standard & Poor’s 500 index declined 38.15, or 4.19 percent, to 871.77, while the Nasdaq composite index fell 51.57, or 3.13 percent, 1,593.55.
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 0.40 percent from 0.58 percent late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.
Central banks around the world were forced to cut interest rates this week after continuing problems in the credit market triggered concerns that banks will run out of money. Analysts have described the mood on trading floors as panicked, with investors bailing out of stocks on fears there is no end in sight to the financial carnage.
Gold prices climbed $10.60 to $897.10 an ounce on the New York Mercantile Exchange, while oil prices fell. A barrel of light, sweet crude declined $3.60 to $82.99 a barrel on the Nymex.
President Bush said Friday the government’s efforts to rescue the financial sector was powerful enough to succeed but that it would take some time to be fully implemented.
His remarks came as finance ministers and central bankers from the Group of Seven nations gathered Friday in Washington to discuss the economic meltdown. One of the potential remedies expected to be reviewed at the meeting is for governments to guarantee lending between banks.
