It was another bad day on Wall Street as the Dow Jones Average fell through another psychological barrier:
Investor worries about the economy in general, and financial companies in particular, continued to erode the markets on Monday as the Dow Jones industrial average fell below 7,000 for first time since October 1997.
“It’s pretty despondent everywhere,” said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong. “O.K., there are signs that some of the leading indicators have stabilized to some extent, but it’s at a very, very low level, and we’re not seeing corporate investment picking up, or consumers starting to spend again — in other words, the traditional mechanisms by which economies come out of a recession are absent at this time.”
At the close, the Dow was down 299.64 points, or 4.2 percent to 6,763.29, while the Standard & Poor’s 500-stock index declined 34.27 points or 4.6 percent, to 700.82. The Nasdaq fell 3.9 percent or 54.99 points to 1,322.85.
Investors expressed concern about the ability of banks to raise more capital, after the British bank, HSBC Holdings, offered new shares at a substantial discount. HSBC Holdings, the global British bank, fell 18.7 percent after the bank said it would seek to raise nearly $18 billion in capital from shareholders and shut down its American consumer lending business.
Washington also agreed on Monday to provide another $30 billion to the insurance giant, American International Group, which also reported a $61.7 billion loss. On Friday, Washington took a larger stake in Citigroup, reducing the value of shareholders’ stock.
“Another day, another 200 points,” David Dietze, chief investment strategist at Point View Financial Services, said, comparing the daily markets to water torture.
Yea, but how long can we keep that up ?
Since the current crisis started in September, the Dow has fallen 4,209.22 points, or 38.37%, and the bottom is nowhere in sight.