Dow Drops 500 Points as Banks Fall |
After the article on today’s market sell off, please note the addendum that I have added below the text of the Dow story. In this environment, I think it is critically important for conservatives and right-center voters of all parties to stay true to our convictions and not be swayed by the Left’s siren song of a return to the failed policies of Depression era economic theories.
~~John Cronin~~
http://online.wsj.com/article/SB122337732542911119.html?mod=article-outset-box
Frightened investors took no comfort in regulators’ continued efforts to stanch the credit crisis and sent stocks to more steep losses, led by the financial sector.
The Dow Jones Industrial Average rose nearly 170 points at its morning high but slumped to finish lower for a fifth consecutive day, with the selling gaining momentum as the closing bell approached.
The Dow finished near its daily low, off 508.39 points, down 5.1%, at 9447.11. It was led down by a 26.2% plunge in shares of component Bank of America, which is cutting its dividend and seeking $10 billion in capital. J.P. Morgan Chase and Citigroup also saw declines of more than 10% each. The Dow has plummeted more than 1400 points, or 13%, during its five-day losing streak.
Other stock measures tumbled. The S&P 500 dropped 5.7% to 996.24. All its sectors declined, led by a 10.1% drop in financials. The technology-focused Nasdaq Composite Index lost 5.8% to end at 1754.88. The small-stock Russell 2000 tumbled 6.2% to 558.96.
Stocks began to turn sharply lower as chatter spread around trading floors that Mitsubishi-UFJ could abandon its agreement to take a stake in Morgan Stanley. The buzz sent Morgan shares sliding roughly 30% and helped cause a broader rush out of stocks. Morgan Stanley later issued a statement saying that the deal remained on track, helping stanch the selloff, but its shares still ended down 24.9%. Rivals like Merrill Lynch and Barclays also cratered, falling 25.6% and 22.7%, respectively.
Peter Boockvar, equity strategist at Miller Tabak, said the “noise” surrounding Morgan Stanley had put the entire market on edge. “Everybody’s nerves are completely fried,” he said “On the slightest chance of a reversal, everyone runs for the doors.”
Addendum:
Public Passes on New Deal
WSJ Journal Print Edition Oct. 7, 2008
Perhaps you’ve read—several hundred times by now—that the financial panic means we are returning to a new day of expanding government. Well, maybe not, if the American people are consulted. A new survey by the Kaufman Foundation describes a country that is worried about the impact of the financial turmoil on their lives, but is equally worried about what government might do to fix it.
For example, the survey asked, “What poses the greatest threat to your own economic situation?” The runaway winner was “higher taxes” which 50% cited as the first or second biggest worry. “The low value of thew dollar abroad” was runner up, picked first or second by 30% of respondents. The “housing market collapse” clocked in at third, with 25%, the federal budget deficit and debt next at 20%, and “corporate fraud and abuse” at 17%.
Perhaps this explains why all that pounding by John McCain and Sarah Palin about corruption on Wall Street hasn’t done much for their standing in the polls. Perhaps this also explains why Barack Obama is at such pains to conceal his plans to raise taxes.
The survey, which was conducted by Luntz, Maslansky Strategic Research between Sept. 26 and 29, did show that 59% supported increased government regulation of the financial markets. Amid the current mess, that’s not surprising. But when asked in whom they had the most “faith and confidence” when it comes to guiding the economy, a mere 7% picked “the government in Washington.” “The American people,” with 25%, was the favorite; “the free market system,” with 14%, got twice the support of the Beltway class. The public doesn’t seem to be aching for a new New Deal.
~~John Cronin~~
Tags: Bank of America, Citigroup, J.P. Morgan Chase, Morgan Stanley