"Disaster fears put investors on edge; Stocks plummet, then recover; Dow drops 312 pts, and it feels like relief" by Robert Gavin, Globe Staff | October 25, 2008
On the anniversary of the start of the 1929 crash, US stocks yesterday stepped back from the abyss, absorbing another day of steep losses but avoiding the catastrophe that investors and analysts feared when markets opened in New York.
The opening followed another wave of panic selling in overseas markets and a brutal sell-off in stock futures that projected losses of 1,000 points or more for the Dow Jones industrial average. The Dow plummeted more than 500 points in the first few minutes of stock trading, sparking concerns that so-called circuit breakers, which would suspend trading if the Dow fell more than 1,100 points before 2 p.m., would kick in.
Stocks, however, rebounded from the opening in one more day of seesaw trading. The Dow lost 312 points to end at 8,378.95, the lowest close since April 2003. That a 300-point plunge in the Dow would become a cause for relief illustrates how fragile markets and investor psyches have become, analysts said. Fear of potential disasters, from hedge fund collapses to a global recession to a freeze in credit, have investors on edge, ready to sell at any hint of trouble.
Yesterday's plunge, while not as bad as feared, ended another rough week for Wall Street. The Dow lost about 5 percent for the week and has plummeted 25 percent since the end of September alone. The Nasdaq took a worse beating, losing more than 9 percent for the week. The S&P 500 lost nearly 7 percent.
Many analysts expect the declines to continue over the next several weeks, and possibly for months. Fear is driving the market now, and investors are acting on bad news, which should be coming for a while.
Yeah, it is ALL PSYCHOLOGICAL!! The FACTS have nothing to do with it!!!
See: The Boston Globe Says Fear, Not Facts, Driving Dow Down
Corporations are now reporting earnings, and many have seen profits slip. In addition, they are warning of weaker earnings in coming months in the face of an economic downturn.
Economic data reported over the next several months are likely to be glum, too. The United States is probably already in recession, many economists say. Government data will probably show the economy contracting, unemployment rising, and employers cutting jobs.
But it is FEAR that is driving the market -- not these FUNDAMENTAL FACTS!! Yeah, I DO GET TIRED of being LIED TO by business pukes, readers!
Other countries are also heading for recession. In England yesterday, the government reported that its economy had shrunk in the third quarter, which ended Sept. 30. The news sparked a sell-off in London stock markets.
Analysts said market psychology will eventually change as investors begin to see signs the economy is nearing bottom and start looking for bargains. The stock market, which is forward-looking, tends to turn around about six months before the general economy does. Some analysts forecast the economy will begin to recover next summer.
I'm insulted; I'm tired of being told it is ALL PSYCHOLOGICAL!
Despite the gloomy outlook, economists said positive developments are underway that should boost the economy and stock markets over the next several months.
Tired of them farting in our faces, too!!!
Oil prices have plunged more than 50 percent since peaking above $145 in July. That is putting more money in consumers' pockets and reducing business costs. Oil closed below $65 a barrel in New York yesterday.
Interest rates are falling, too. The Federal Reserve is expected to cut its benchmark rate by as much as a half-point when policy makers meet next week. That would bring the rate back to a historic low of 1 percent. Low interest rates boost the economy by encouraging consumers and businesses to borrow and spend.
And if NO ONE wants to BORROW (or if the banks ain't lending)?
In an interview with Globe editors and reporters yesterday, Representative Barney Frank, the Newton Democrat who chairs the House Financial Services Committee, said he expects Congress to pass another economic stimulus package that would probably include money for road and bridge repairs, state Medicaid programs, unemployment and food stamp benefits, and tax relief for middle- and working-class taxpayers. --more--"
We want WORK, not WELFARE, Barn!
And how come we couldn't have that WITH the BAILOUT, huh?
