U.S. stocks market tank into the close; Dow marks 3rd-largest point loss
“There are only two things that will turn this market around: One is any sign that the credit markets are thawing out, and the second is we finally find a level at which stocks have finally become too cheap,” said Art Hogan, chief market strategist
at Jefferies & Co.
One year to the day after climbing to its peak of 14,164.53, the Dow Jones Industrial Average ($INDU: 8,213.60, -365.59, -4.3%) sank 678.91 points, its third-largest point loss on record, to finish at 8,579.19, pushing the blue-chip index under the 9,000 level for the first time since August 2003.
The Dow’s close leaves it 5,585.34 points, or 39.4%, under its year-ago high.
All of the Dow’s 30 components closed under water.
“Indicators on the state of the credit markets have improved over the past two days but the improvement has not been enough to turn the tide on the equity market’s slide,” said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co.
With Standard & Poor’s threatening a possible downgrade, General Motors Corp. (GM:5.00, +0.24, +5.0%) was the heaviest weight on the Dow industrials. The stock fell 31.1%, making its first dip below $6 a share since 1951.
Off the Dow, shares of Ford Motor Co. (F:2.22, +0.14, +6.7%) slid 21.8%.
Among the blue-chip index’s few bright spots during the session, IBM (IBM:87.01, -1.99, -2.2%) erased its earlier gains to fall 1.7%, after the industry bellwether released its third-quarter earnings ahead of schedule, reporting a 20% profit rise and reiterating its 2008 outlook.
The S&P 500 Index ($SPX:857.24, -52.68, -5.8%) fell 75.02 points, or 7.6%, to 909.92, with the financial sector fronting sector losses that stretched across the S&P’s ten industry groups.
Noteworthy laggards among financial shares included XL Capital Ltd. (XL:5.03, +1.02, +25.3%) , its shares down 53.8%, while Lincoln National Corp. (LNC:19.55, +1.24, +6.8%) dropped 34.5%.
Wachovia Corp. (WB:4.75, +1.15, +31.9%) ,American International Group Inc. (AIG: 27.01, -0.68, -2.5%) , down 14.8% in the wake of its profit warning. Read Retail Stocks.
After treading in positive turf for part of the session, the Nasdaq Composite Index (COMP: 1,572.54, -72.58, -4.4%) lapsed into the red, ending down 95.21 points at 1,645.12.
Volume on the New York Stock Exchange topped 2 billion, and declining stocks outran those advancing 10 to 1. On the Nasdaq, nearly 1.4 billion shares traded, with decliners surpassing advancers nearly 5 to 1.
In commodities trade, gold fell, with the contract for December delivery dropping $20 to end at $886.50 an ounce on the New York Mercantile Exchange. Read Metals Stocks.
Oil futures for November delivery fell $2.36 to $86.59 a barrel, its lowest closing level so far this year. See Futures Movers.
Rate cuts
The stock market’s continued decline comes one day after the U.S. Federal Reserve, European Central Bank, Bank of England and other central banks made coordinated rate cuts. The moves seemed to make little impact on Wednesday with the Dow industrials dropping 189 points, the Nasdaq Composite falling 14 points and the S&P 500 shedding 11 points.
“Despite the poor close, I do think we are finally at the point where the short-term downside risk is minimal. While the upside might take time to develop, recession, earnings and a credit crisis are discounted,” said Marc Pado, U.S. market strategist at Miller Tabak.
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Time October 10, 2008 at 5:07 pm
[...] One year to the day after climbing to its peak of 14164.53, the Dow Jones Industrial Average ($INDU: 8213.60, -365.59, -4.3%) sank 678.91 points, its third-largest point loss on record, to finish at 8579.19, pushing the blue-chip index …[Continue Reading] [...]