The consequences of the credit crunch are starting to hit home, and Wall Street isn’t liking what it hears:
The malaise on Wall Street simply will not lift.
Despite cheaper oil and looser credit, stock investors on Wednesday could not shake their fears about the consequences of an economy that many believe is already in a recession. Worries about the corporate sector sent the Dow Jones industrials down more than 500 points for the day.
The broader stock market fell almost 6 percent, a plunge that in any other financial environment would be considered extraordinary. Instead, it counted only as the worst loss since last Wednesday, when the Dow plunged 733 points.
At its weakest point in the final hour Wednesday, the Dow was off by nearly 700 points. It ended at 8,519.21, down 514.45.
The bloodletting began early after a batch of weak earnings from some of the nation’s largest industrial giants. Boeing, Merck, and Wachovia — major businesses across a range of industries — all reported poor earnings for last quarter and warned about a bleaker outlook for the remainder of the year.
The poor earnings blotted out improvements in the credit markets, including the third straight day of declines in bank borrowing rates.
The declines in stocks overshadowed an encouraging milestone for oil prices, which fell below $68 a barrel — a low for the year — before climbing back slightly. Crude oil was more than $4 lower in New York trading at $68.15 a barrel.
Meanwhile, the American dollar continued to strengthen against foreign currencies. The British pound fell to a five-year low against the American currency, and the euro has stumbled to a two-year low over the past few weeks.
Since the unofficial beginning of the downturn on September 22nd, the Dow has fallen 2496.38 points, or 22.66%:
As of right now, there’s seemingly no end in sight.
