DOW Breaks 11k

[Ryan Ruck]

The DJI closed at 11,011.90 today (01/09).

So, how many heard the good news in the MSM?

This has to be the worst economy since Hoover!! It's all Bush's fault! LOL!

[Cary]

DJIA is back under 11,000. Closed at 10,930 today. The next great leg of the bear is back. It won't go straight down, but the surprises will be to the down side.

[Cary]

The DJIA was down 99 points today, closing at 10,792. We're due for an oversold bounce, especially with this being quadruple witching options expiration on Friday. Typically a bullish week. We may even close over 11,000 for a few days, but the impulsive move to the downside is heralding a return of a cyclical bear market within the larger secular bear market that started in early 2000. The DJIA, S&P 500 and NASDAQ indices never made new all time highs. The DJIA got to within about 80 points, but stock markets around the world have all turned down in unison. I'll post again when the Dow breaks below 9,000.

[Brykovian]

I'll post again when the Dow breaks below 9,000.

Can we start a pool as to when Cary will be posting again?

I'm sure we'll see it drop again at some point (DJIA went above 12,400 today), but it may be a while. I know from Anomalies that Cary's opinion is to look for trouble in the 2010-2012 range ... will he be posting on this topic before that timeframe?

-Bryk

[Luke]

At it's present rate the DOW is likely to break 11k again! Yikes!

What goes around comes around I guess.

The only stock this ole hillbilly has is the family cow, and she ain't looking too good right now!

[Brykovian]

Dow is down to ~10,700 after 2 big drops in 3 days. Will we be seeing Cary again soon?

-Bryk

[vector7]

Wednesday, September 17, 2008
Updated at 17 September 2008 0:27 Moscow Time
The Moscow Times » Issue 3990 » Frontpage Top

Markets Post Record Single-Day Losses
17 September 2008By Tim Wall, Tai Adelaja / Staff WritersThe ruble-denominated MICEX Index fell by 17.5 percent Tuesday, a single-day record, as the country's oil-driven stock market was severely battered by the global economic hurricane spreading from the United States.

The dollar-denominated RTS fell by 11.5 percent to 1131.1 points, wiping nearly $80 billion from the market value of the country's leading companies in just one trading session. More than $750 billion has been lost since May.

Trade on both exchanges had to be temporarily suspended late Tuesday afternoon as shares appeared to be going into free fall. When trading resumed briefly on the MICEX, it slumped still further to 865.16 points before closing at 881.17 points, nearly 190 points off its opening level.

Russian state-controlled banks were hit particularly hard by the fallout from the collapse of investment bank Lehman Brothers in the United States, while insurance giant AIG was struggling to find rescue funds Tuesday, as the dollar lending rate doubled overnight in New York.

VTB shares fell an astounding 31.1 percent, bringing the fall in value since its May 2007 initial public offering to 77 percent, while Sberbank shares lost 22.7 percent.
The Central Bank and Finance Ministry injected a total of 511 billion rubles ($20 billion) into money markets Tuesday. Prime Minister Vladimir Putin sought to reassure investors, saying in televised comments that the figure would increase Wednesday.

Officials from the Central Bank and the ministry would "discuss further joint actions" to boost liquidity, Putin said at the start of a meeting with visiting Azeri President Ilham Aliyev.

"We have no doubts that the security cushion that was formed in the Russian economy over the past few years will work," Putin said, adding: "We are studying the possibility of using Central Bank instruments with long-term impact. We will act carefully."

Finance Minister Alexei Kudrin declined to comment Tuesday on possible state support for Russia's banks.

As global oil prices fell as low as $91 per barrel, Russian blue chip energy and metal stocks received a battering amid fears that the U.S. financial crisis could cause a weakening in global demand for oil.

State-controlled giants Rosneft and Gazprom fell 21.8 percent and 18.5 percent, respectively, while Surgutneftegaz was down 18.4 percent and LUKoil fell 10.9 percent. Oil pipeline monopoly Transneft's preferred shares fell by 25.6 percent.

Kudrin said the federal budget would break even next year with an average oil price of $70 per barrel and that the government expected an average of $112 this year, RIA-Novosti reported.

Andrey Saiko, a spokesman for Kudrin's ministry, said he could not immediately comment on the market plunge.

Among metals shares, Polyus Gold was down a whopping 27.5 percent, while Norilsk Nickel fell 8.4 percent.

The trading of several stocks will be suspended on both exchanges for an entire day, to resume only on Thursday. The RTS suspended trading of shares of OGK-5, RBK Information Systems, NizhniKamskNeftekhima and Rostelecom, while TGK-1, TGK-7, RusHydro, Tatneft, Rostelecom and Volgatelecom will be frozen on the MICEX board.

The MICEX last suspended trading in June 2006, while the RTS last called a timeout in November 2000, spokespeople for the indexes said.

"The stock exchange today is a one-way track, with many sellers and no buyers," said Dmitry Parfyonov, a trader with Prospect Investment.

"There's a liquidity crisis, the repo volume is increasing, the Central Bank is offering more short-term credit to cover current expenses," Parfyonov said. "All of this has combined to throw the market into a panic and push down share prices."

"The Russian stock market has become an integral part of the Russian economy as a whole," said Vladimir Matias, managing partner at Asset Capital Partners. "The effect could be devastating to some players, as it could consequently also worsen credit standings and refinancing costs for some listed large and mid-sized companies."

While the news from the U.S. hurt stock indexes worldwide, the Russian markets fell faster and deeper than most, in part because of frayed investor nerves after the recent conflict with Georgia and the economy's heavy reliance on commodities, analysts said.

"Once the RTS crossed the 1,200 level, it triggered a fresh wave of margin calls and, as most investors could not meet the call, it led to forced selling," said Chris Weafer, chief strategist at UralSib.

"There are no, or very few, buyers because of the fear of global markets and the falling oil price. To say that the market is cheap on a rating basis is totally meaningless when the dominant sentiment is fear," he said, adding: "No. Forget that. Scared witless, and the dominant emotion is one of shock."

Apart from injecting liquidity into the banking system, and using some money from the National Welfare Fund, the government can do little in the short-term other than to "pray for a floor in oil," Weafer said.

While the damage from falling stock prices might not be immediate, there is the danger that it could spread like a contagion into the broader economy.

"The $9 per barrel decline in oil prices over the last 24 hours will have an economic effect," said Ronald Smith, chief strategist at Alfa Bank. "It will make it much more difficult for the government to cut oil taxes … as the government's own revenues are being curtailed sharply."

"There is no direct effect on the economy, day to day, but the longer this goes on, the contagion will lead to a loss of confidence, leading to liquidity and insolvency problems," Weafer said.

"This would then start to hit investor confidence and capital inflows, and could lead to a falling off of consumer activity, hitting economic growth."

"These losses are like a virus," he said. "Treat it now, and you can contain it. Leave it, and it will infect the whole system."

Staff Writer Maria Antonova contributed to this report.

[vector7]

Moscow tries to stem market panic

Moscow's stock markets are to remain closed until Friday, as the government tries to stem a plunge in share prices and restore confidence in the economy.

Finance Minister Alexei Kudrin said 60bn roubles (£1.3bn) would be pumped into Russia's three largest banks to help bolster the financial markets.

President Dmitry Medvedev said supporting the financial system was the government's "most important priority".

The crash has brought back memories of Russia's financial crisis of 1998.
Then the rouble was devalued, the country defaulted on its debts, and many banks failed.

While the country's economy as a whole is now in far better shape, there is still great uncertainty over what is around the corner, leading to a collapse in confidence, says the BBC's James Rodgers in Moscow.

Investors flee
Financial regulators halted trading on Wednesday after stocks fell to the lowest level in nearly three years.

Russia was not alone. Markets around the world have dived this week as several big banking names have gone under due to the effects of the credit crunch.

But it has shocked a stock market which was hitting record highs as recently as May this year, helped by an economy riding high on record oil and gas prices.

While the global turmoil and a slide in the price of Russia's abundant oil are some of the causes, analysts also point to investors fleeing Russia in the aftermath of its war with Georgia.

About £20bn has been pulled out of Russia since early August, Reuters estimates.
The executive board of Micex, one of Russia's two main exchanges, called the situation "extraordinary".

In a bid to support the banking sector, the finance ministry has pledged billions of dollars of loans.

Facing a liquidity squeeze, central bank officials on Thursday cut the reserves banks were allowed to hold, forcing them to release billions of roubles.

[vector7]

Putin Blames the U.S. for Russian Financial Turmoil

http://www.bloomberg.com/apps/news?p...&refer=germany

By Alex Nicholson and Henry Meyer

Sept. 19 (Bloomberg) -- Prime Minister Vladimir Putin blamed the U.S. financial crisis for causing market turmoil in Russia's economy, which he said remains fundamentally sound.

``All the fundamental indicators of the Russian economy are healthy,'' Putin told foreign business leaders in the Black Sea town of Sochi, including the chief executive officers of BP Plc and Royal Dutch Shell Plc, in comments posted on the Russian government's Web Site. ``The difficulties are mainly caused by the U.S. and European markets.'' He added that the current price of oil is ``comfortable'' for the Russian economy.

The Russian authorities halted stock trading for two days this week to arrest the worst financial crisis since the nation defaulted a decade ago. Capital flight sparked by last month's war in Georgia, tumbling commodity prices and the seizure in capital markets made Russia this quarter's worst performer among the 20 biggest markets, data compiled by Bloomberg show. Trading resumed today with a 14 percent surge in the Micex Index in the first five minutes of trading.

The stocks recovery came after Russia said yesterday it would slash export tariffs on oil and President Dmitry Medvedev pledged $20 billion to prop up the market, which was closed after the Micex Index lost 25 percent over three days.

Tax Burden
Putin in his meeting late yesterday said that additional steps to lower the tax burden on oil companies might be taken in 2010, while the funds to support the market would come from the budget rather than Russia's oil funds.

``I don't believe that the time has come to spend our oil and gas income,'' he said.

The Reserve Fund, created to support the budget if oil prices drop, held $142.6 billion on Sept. 1, while the Wellbeing Fund, which will be used to finance pensions, was worth $31.9 billion. The Finance Ministry is due to prepare a plan by Oct. 1 for investing the National Wellbeing Fund in higher yielding stocks and bonds abroad and has said it may invest a portion of the money within Russia.

Putin promised the business executives, who were in Sochi for an investment forum today, that Russia would remain open to foreign investment despite tensions with the West sparked by the Georgia conflict.

``Our policy stays the same,'' he said. ``There will be no closing of the market. We will take no politically motivated decisions.''

Given the global financial turmoil, Putin said the government would take a ``pause'' on the question of lowering sales tax. Finance Minister Alexei Kudrin has fought a proposed reduction of the tax rate to 12 percent from 18 percent proposed by the economy ministry and big business. Kudrin argues that instead of spurring growth the move will cut into budget revenue and spur inflation by an estimated 3.8 percent.

Last Updated: September 19, 2008 03:49 EDT

[vector7]

Can we start a pool as to when Cary will be posting again?

I'm sure we'll see it drop again at some point (DJIA went above 12,400 today), but it may be a while. I know from Anomalies that Cary's opinion is to look for trouble in the 2010-2012 range ... will he be posting on this topic before that timeframe?

-Bryk

Where's Cary?

Dow recovers to close down 370 after plunging 800
Monday October 6, 4:42 pm ET
By Joe Bel Bruno and Tim Paradis, AP Business Writers Dow plunges 800 before recovering and closing down 370 amid growing fears over credit crisis NEW YORK (AP) -- Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials plunging as much as 800 points -- their largest one-day point drop -- before recovering to close with a loss of 370.

The catalyst for the selling, which also took the Dow below 10,000 for the first time in four years, was investors' growing despair that the spreading credit crisis will take a heavy toll around the world.Investors have come to the realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets.

That sent stocks spiraling downward in the U.S., Europe and Asia, and drove investors to sink money into the relative safety of U.S. government debt. Fears about a global recession also caused oil to drop below $90 a barrel.

"The fact is, people are scared and the only thing they're doing is selling," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "Investors are cleaning out portfolios and getting rid of everything because nothing seems to be working."

The selling was so extreme that only 264 stocks rose on the NYSE -- and 2,986 dropped. That's a telling sign considering the stock market is considered a leading economic indicator, with investors tending to buy and sell based on where they believe the economy will be in six to nine months.

Monday's stock trading extended what has been an exceptional stretch of volatility, in which triple-digit drops in the Dow are becoming almost commonplace. The steep decline indicates that investors are becoming more convinced that the country is leading a prolonged economic crisis that is shifting to other nations.

"The market view is shifting from looking just at the misery of the financial sector to the global economy," said Georges Ugeux, chairman and chief executive of New York-based Galileo Global Advisors. "There are enough indication that two things are happening: The crisis is spreading to other sectors, and that it is becoming global."

Ugeux believes Monday's rout had little to do with any short-term problems facing the market, such as paralyzed credit markets or ailing financial companies. He believes that, regardless of the late-day rebound in stocks, "the reaction is clearly giving a downtrend and that there is a lack of confidence of investors into the future growth of the U.S. and the world economy."

The Dow fell as much as 800.06, then recovered in erratic trading to a loss of 369.88, or 3.58 percent, to close at 9,955.50, dropping below 10,000 for the first time since Oct. 29, 2004. The Dow surpassed its previous record for a one-day point decline -- 778, which the blue chips suffered a week ago when investors feared the bailout package might not pass Congress.

Broader indexes also tumbled. The Standard & Poor's 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.

In Asia, the Nikkei 225 closed 4.25 percent lower. Europe's stock markets also declined, with the FTSE-100 down 5.77 percent, Germany's DAX down 7.07 percent, and France's CAC-40 down 9.04 percent.

The global sell-off came after governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits. As the U.S. tries to repair its battered banking system, the German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG. And France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

The Fed also took fresh steps Monday to help ease credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.

Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., said government intervention certainly might help. However, he believes investors are sensing that what's happening in the economy is a shift in the extent to which consumers and businesses take on debt, a change that will take years to play out.

"This is a global deleveraging of many economies," he said. "It might appear that you're going into the abyss where the economy grinds to a halt and the financial system goes into complete disarray. But, what the market is really reading here is that this is a global phenomenon, and when you delever like this, it is a process that takes a very long period of time measured in years, not quarters."

The anxiety was again obvious in the credit markets. The yield on the three-month Treasury bill fell to 0.43 percent from late Friday at 0.50 percent. Demand for bills remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.

Investors also moved into longer-term Treasury bonds. The yield on the 10-year note fell to 3.47 percent from 3.60 percent late Friday.

Anthony Sabino, a professor of law and business at St. John's University in New York, said the "market is displaying one of its worst traits with a herd mentality, and investors have an appetite for feeding on fear." He cautions that, while there are deep economic and financial problems being faced, it is still not a nightmare scenario.

"Most certainly, this is not the Great Depression of the 1930s, but (is like) the savings and loan crisis of the 1980s -- and we bailed them out," he said. "Once people catch their breath, they'll see this is the proper analogy and this will breathe life back into banking institutions."

But, most analysts believe that there will be no quick fixes to the current financial crisis. Ryan Jacob, portfolio manager for the Jacob Internet Fund, said he's sensing the market might be getting closer to a short-term bottom but that problems for the economy likely will persist.

He said the passage of the bailout package, billionaire investor Warren Buffett's investment last week in General Electric Co. and even a skirmish between Wells Fargo & Co. and Citigroup Inc. over control of Wachovia Corp. are positive signs.

"We've had some positive anecdotal events in the last week so it's making me a little bit more confident," Jacob said. "These are all signs that make it more likely than not that we're trying to find a near-term bottom."
He's been hunting for bargains lately.

"We had had been a little bit cautious up until really about a month ago," he said. "Over the last few weeks we've been increasing our position levels."

Frederick Dickson, chief market strategist at D.A. Davidson & Co., believes investors are eager for any signs about the well-being of the economy. He doesn't believe that will happen until Wall Street overhauls its expectations for growth of corporate earnings and the overall economy.

"Wall Street at this point is shifting its attention from whether Congress was going to act on the emergency stabilization bill to the realization that the economy is slowing significantly faster than most analysts had expected," he said. "The downturn has shifted from first gear to about third gear in about two weeks."

http://biz.yahoo.com/ap/081006/wall_street.html

[vector7]

US stocks fall amid global sell-off

Germany has agreed to bail out troubled mortgage lender Hypo Real Estate [AFP] Markets across the world have fallen dramatically as fears increase that the $700bn bailout passed in the US on Friday will prove insufficient. At the same time, European leaders are coming under pressure to assist troubled financial institutions. The Dow Jones Industrial Average fell below the 10,000 mark for the first time in four years as investors worried that the credit crisis was spreading. By Monday afternoon it was down 729 points at 9,595, a drop of seven per cent. One-day free fall By the close of trading in Europe, French stocks had fallen 9.04 per cent and the German DAX was down 7.07 per cent. London's FTSE 100 suffered its third biggest ever one-day fall, dropping 7.85 per cent. Japan's Nikkei index dived nearly five per cent earlier on Monday to its lowest point in more than four years, and stocks all across the region followed suit. The $700bn rescue package has failed to rally Wall Street [AFP] With the world's markets in free fall, the US treasury department named on Monday a former Goldman Sachs executive to oversee spending the $700bn earmarked for the rescue plan and pledged to work with other countries to calm global financial markets. The US administration announced that it had chosen Neel Kashkari, an assistant treasury secretary for international affairs, to head the treasury's new Office of Financial Stability on an interim basis. Kashkari, 35, helped draft the bailout legislation as a close adviser of Henry Paulson, the treasury secretary. John Terrett, Al Jazeera's correspondent in New York, said: "There is serious consideration here that the $700bn bailout rescue package is not enough. "The Libor, the rate at which banks lend money to each other, has gone up on Monday which wasn't supposed to happen. "The Federal Reserve is throwing everything and the kitchen sink at this. The issue is impinging on the lives of ordinary Americans and people here are very concerned about it." Reflecting on the European markets as a whole, Nicole Elliott, a technical analyst with Mizuho Securities, said: "It's just in free fall. The outlook is still very bearish and we are nowhere near the bottom. There is no reason to buy anything at the moment. John Haynes, strategist at Rensburg Sheppard Investment Management, said: "People have decided that markets have no ability to repair themselves and politicians have control of this process. The buyers have stepped away, and the sellers are still there." Shares suspended Amid the turbulence, the euro fell heavily against the dollar while oil prices dropped below $90 a barrel, their lowest level in eight months. Trading on Russia's two main markets was suspended after the ruble-denominated MICEX nosedived more than 15 per cent and dollar-denominated RTS fell 14 per cent. Meanwhile, Iceland's stock market suspended trading in all financial shares, including its three biggest banks, amid reports of a government rescue of the stricken banking sector. Trading in Kaupthing, Landsbanki and Glitnir banks and other finance stocks was halted at 1000 GMT. Geir Haarde, Iceland's prime minister, was said to be consulting opposition party leaders to discuss efforts to reassure investors. The government last week acquired 75 per cent of Glitnir, the country's third largest bank. Iceland is particularly vulnerable to worldwide financial turmoil as the finance sector represents a major part of the island's economy, eight times its gross domestic product. 'Miserable' "It's a miserable state of affairs. And then you add to that the banking problems we've seen over the weekend," Henk Potts, strategist at Barclays Stockbrokers, said. "There's the bailout plan, which is good news, but there's uncertainty over the price at which assets are going to be bought. And the reality is that it will take some time to see the benefit." "It's a miserable state of affairs. And then you add to that the banking problems we've seen over the weekend" Henk Potts, strategist at Barclays Stockbrokers Countries around the world have taken a number of measures aimed at calming the crisis but they seem to have done little for investors' nerves as they fled to government bonds, gold and the low-yielding yen. The German government stepped in to rescue ailing mortgage lender Hypo Real Estate on Sunday after opposing a Europe-wide bailout similar to that adopted in the US. Angela Merkel, the German chancellor, also pledged that the country would also offer an unlimited guarantee for all private savings accounts. She had previosuly criticised moves by Ireland and Greece to guarantee deposits. "We tell all savings account holders that your deposits are safe. The federal government assures it," she said after an emergency government meeting called in an attempt to prevent a run on the banks. So far, Britain has avoided pledging to guarantee all desposits in its banks, but the country's third largest party said on Monday that such a move was inevitable. "Ireland's action last week to guarantee all deposits made a common European approach to deposit guarantees necessary. Germany's decision today makes it completely unavoidable," Nick Clegg, the Liberal Democrat leader, said. Emergency meeting British officials will discuss the financial crisis in a meeting of the new emergency economy committee on Monday, with Alistair Darling, the finance minister, reportedly considering using public funds to take stakes in banks to help shore them up. The plan would steer a middle course between full nationalisation of banks, such as that used to save Northern Rock and Bradford & Bingley, and the provision of further loans. Denmark and Sweden have also moved to improve the protection of bank accounts, with Copenhagen announcing that commercial lenders had agreed to contribute about $6.4bn to a fund that will help insure account holders from losses. In Sweden, the government said it would raise the limit for deposit insurance to $71,000. Austria is also expected to consider guaranteeing bank deposits. http://english.aljazeera.net/busines...450919363.html

[vector7]

Stocks zigzag, end lower after emergency rate cut

Wednesday October 8, 4:58 pm ET
By Joe Bel Bruno and Tim Paradis, AP Business Writer Wall Street seesaws, then closes lower as investors seek stability after emergency rate cut NEW YORK (AP) -- An angst-ridden Wall Street tried but failed to find stability Wednesday, with investors attempting to determine whether an emergency interest rate cut would end the paralysis in credit markets. The major indexes moved in and out of positive territory before turning sharply lower in late trading and leaving the Dow Jones industrials down nearly 190 points.The Federal Reserve and other leading central banks cut rates in the hope that credit markets would soon relax and that banks would begin lending more freely to businesses and consumers. The Fed lowered rates by a half-point, saying in a statement that the turmoil in financial markets posed a further threat to an already shaky economy; it was joined in the rate cut by the European Central Bank, Bank of England, The Bank of Canada, the Swedish Riksbank and the Swiss National Bank.

But interest rate changes take months to work their way through the economy, and while investors clearly were happy with the central banks' actions, they were also well aware that in the near term, banks remain reluctant to lend because of fears they won't be paid back.

That fear, which increased after the failure of Lehman Brothers Holdings Inc. in mid-September, has all but shut down the credit markets, making it increasingly hard for companies and individuals to borrow, and in turn, posing a further threat to the economy. Wall Street has plunged in response to scarcity of credit; stocks initially rose on the rate cut Wednesday, then spent the day seesawing as investors were torn between some optimistic bargain hunting and the reality of the credit markets' ongoing troubles.

Although Wednesday's losses were smaller than Monday's 370-point drop in the Dow and Tuesday's 504-point slide, it was obvious that the stock market is still extremely shaky. There were signs that investors were picking and choosing -- the Standard & Poor's 500 index and the Nasdaq composite index both had percentage declines about half the size of the Dow's -- but nervousness still drove the market.

"Until we have some more confidence here it's going to be difficult to sustain any rally," said Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa. "Unfortunately you probably sell the rallies for a little while until we run out of sellers."

According to preliminary calculations, the Dow Jones industrial average ended down 189.01, or 2.00 percent, at 9,258.10.
Broader stock indicators also fell. The S&P 500 index slid 11.29, or 1.13 percent, to 984.94, and the Nasdaq fell 14.55, or 0.83 percent, to 1,740.33.

With its precipitous drop of the past few weeks, Wall Street is approaching the magnitude of the losses it suffered during the bear market in the early part of this decade. By the time the Dow reached its low of that market, 7,286.27 on Oct. 9, 2002, it had fallen 37.8 percent from its record high close of 11,722.98, set in January 2000.

The Dow has now fallen about 35 percent from the closing high of 14,164.53, reached a year ago Thursday. This week, the Dow has lost 1,067 points, or 10.3 percent.

The worries on the Street have been exacerbated by the spread of the U.S. credit problems overseas. Several banks in Europe have had to be bailed out, and earlier this week, the governments of Germany, Ireland and Greece took steps to guarantee private bank deposits.

Moreover, the markets are mindful of the fact that the government's $700 billion financial rescue plan is in its early stages of implementation and will take some time to have an impact on banks' balance sheets.

David Wyss, chief economist for Standard & Poor's, said the heavy losses in stock markets around the world signal that markets are determining that the credit crisis won't likely be resolved soon.

"There was a general disregard for risk going on in financial markets around the world, it wasn't just the U.S.," he said. "Now they're waking up to risk."

Investors had been anxious in recent days for a rate cut, and despite the Fed taking other steps this week to help the credit markets. Policymakers unveiled a plan to buy massive amounts of commercial paper, the short-term debt used by companies, in a bid to reanimate the credit markets.

It is likely that stocks won't begin to recover for good until investors are certain the credit markets are functioning in a more normal fashion. There are also severe economic problems including heavy job losses and high unemployment that will also need to show improvement.

The uncertainty in the market has driven investors to buy up anything deemed safe, including gold and government debt. For instance, prices of gold shot up $22.60 to $904.60 -- though still off its record of $1,033.90 in March.

Demand for short-term Treasurys remained high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place. The yield on the three-month Treasury bill, which moves opposite its price, dropped to 0.66 percent from 0.81 percent late Tuesday.
However, longer term Treasury bonds fell because they are considered to be less attractive when the Fed cuts rates. The yield on the 10-year note rose to 3.70 percent from 3.51 percent late Tuesday.

The first third-quarter earnings reports are showing signs of strain on companies, and that is adding more uncertainty to the stock market. After the close Tuesday, Alcoa Inc. said it would conserve cash by suspending its stock buyback program and all non-critical capital projects. The aluminum company's earnings fell 52 percent.

Shares of the company fell $2, or 12 percent, to $14.71, by far the steepest decline among the 30 that comprise the Dow industrials.
Retailers' reports of bleak sales in October appeared to dampen investor sentiment at times.

Wal-Mart Stores Inc. said sales rose in September but issued a tepid forecast for October. Often discounters do better than other retailers during tough economic times so the forecast from the world's largest retailer caused some worries about overall retail demand. Wal-Mart fell 29 cents to $54.55.

Luxury retailers turned in a generally weak performance. Saks Inc. fell 96 cents, or 13 percent, to $6.24 after sales fell more than Wall Street had expected.

Declining issues were narrowly ahead of advancers on the New York Stock Exchange, where volume came to a heavy 2.13 billion shares.
The Russell 2000 index of smaller companies fell 12.38, or 2.21 percent, to 546.57.

European indexes had a short-lived bounce after the rate cut. In Britain, the FTSE-100 ended down 5.18 percent, Germany's DAX dropped 5.88 percent, and France's CAC-40 dropped 6.31 percent.

In Asia, Japan's Nikkei 225 closed 9.38 percent lower and Hong Kong's Hang Seng tumbled 8.17 percent hours before the rate cuts were announced; their declines showed the extent of the worldwide gloom. And Russia's two main stock exchanges were suspended because of a massive sell-off right after their openings.

http://biz.yahoo.com/ap/081008/wall_...html?printer=1

[vector7]

[Malsua]

Next floor is 7500.

[American Patriot]

I think people need to wake up, stop acting all panicky and chill out.

My money is stuck there. I'll lose it all if I take it out. If I leave it in and Osama, er obama gets in, we're fucked

[Malsua]

Ugh, down 1.7% at open...another bloodbath.

[Malsua]

I moved to 85% guaranteed/bond stuff in my 401k after the bear stearns thing in March. The Market was at 12.5k . I felt a bit like a panicky Pete at the time but now I am a wise Guru. My whole 401k has only lost about 2% for the year. Had I stuck there I was, I'd be down 40%.

[Ryan Ruck]

The upside to this is that oil is taking a huge dive.

Gasoline is down to around $2.85 in some areas around here.

[American Patriot]

I moved to 85% guaranteed/bond stuff in my 401k after the bear stearns thing in March. The Market was at 12.5k . I felt a bit like a panicky Pete at the time but now I am a wise Guru. My whole 401k has only lost about 2% for the year. Had I stuck there I was, I'd be down 40%.

Wish you would have said something to the rest of us less-than-savvy-market guys.

Since I really don't know SHIT about it.

[American Patriot]

The upside to this is that oil is taking a huge dive.

Gasoline is down to around $2.85 in some areas around here.

The DOWNSIDE is gas is STILL almost 3 bucks. Which is BS.

Gas ought to be dropping back to 25 cents a gallon