Leap Day Loser: Stocks Plummet

Dow Drops 315 Points As Investors React To More Bad Economic News

(CBS/AP)  Stocks fell sharply Friday after a series of depressing economic and corporate reports and high oil prices stoked concerns about the health of the economy. The major stock indexes fell more than 2.5 percent and the Dow Jones industrials lost 315 points.

Investors were unnerved by disappointing quarterly results from American International Group Inc. and Dell Inc. And an index of regional business activity that Wall Street regards as a good indicator of a broader report set to arrive next week had its weakest showing in more than six years.

Oil prices continued to stir concern about inflation after pushing past $103 per barrel for the first time.

Crude oil prices are so high in part because the dollar keeps falling, reports CBS News correspondent Bill Whitaker. That leaves people like Leslie Martinez caught in an economic vice.

"As of January 1st of '08, our mortgage increased approximately $400 a month -- that plus gas has definitely impacted us tremendously," she told Whitaker.

And the summer driving period, when gas prices usually heat up, is still months away.

While stocks made sharp gains in the first three days this week even amid somewhat lackluster economic readings, the litany of concerns investors succumbed to Friday reflected the undercurrent of uncertainty that has kept Wall Street on edge for months.

"We really had to face a plethora of negative news," said Art Hogan, chief market strategist at Jefferies & Co. in Boston. "We just ran out of gas this week."

Hogan said while stocks held up admirably early in the week amid an uneven flow of economic news, they couldn't hold their gains after the latest round of weak economic signals.

The Dow fell 315.79, or 2.51 percent, to 12,266.39. The decline more than erased the week's 200 point gain and sent stocks lower for February, the fourth straight month of declines.

Broader stock indicators also tumbled. The Standard & Poor's 500 index lost 37.05, or 2.71 percent, to 1,330.63, and the Nasdaq composite index declined 60.09, or 2.58 percent, to 2,271.48.

For the week, the Dow lost 0.93 percent, while the S&P 500 gave up 1.66 percent and the Nasdaq fell 2.58 percent. The week's losses would have been steeper had stocks not risen early in the week on hopes many of Wall Street's credit troubles were easing and after IBM Corp. announced a sizable stock repurchase plan.

Bond prices rose sharply as stocks lost ground. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.52 percent from 3.67 percent late Thursday.

The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped 12.5 percent.

The dollar fell further Friday after hitting another low against the euro and sliding to a three-year record against the yen. The slide in the dollar has sent prices of commodities such as oil and gold soaring.

Light, sweet crude jumped to a record of $103.05 overnight before settling down 75 cents at $101.84 a barrel on New York Mercantile Exchange.

Insurer AIG announced a $5.29 billion quarterly loss largely because of steep declines in the value of a portfolio of contracts known as credit default swaps. Such contracts pledge to cover missed payments on debt. The company's losses caught analysts off guard, as many had expected the company to turn a profit.

While each of the 30 stocks that comprise the Dow industrials showed declines, those of AIG were the steepest. The stock fell $3.29, or 6.6 percent, to $46.86.

Computer maker Dell posted a 6 percent decline in its quarterly profit, falling below analysts' expectations, and warned that its business could suffer from reduced customer spending. Dell slid 97 cents, or 4.7 percent, to $19.90.

Bill Shultz, chief investment officer at McQueen, Ball & Associates, said AIG's report left investors uneasy about the prospect of further sizable write-downs of bad debt.

"Every time we get to a point where we think we've finished, another report comes out and says we're not done yet," he said.

He expects Wall Street will continue to proceed with "fits and starts" until investors sense that the bad debt from faltering mortgages has been accounted for and that balance sheets are on the mend.

Some relief for the ailing bond insurance industry is on the way, though the news did little to dislodge Wall Street's glum mood Friday. Billionaire investor Wilbur Ross agreed to invest up to $1 billion in Bermuda-based reinsurer Assured Guaranty Ltd. Assured Guaranty rose $2.87, or 12.6 percent, to $25.65.

In economic news, the Chicago purchasing managers index for February came in at 44.5, a weaker reading than the 48.5 that had been expected, according to Dow Jones Newswires. The report painted a dreary picture of the manufacturing sector and is seen as a precursor to the national Institute for Supply Management report expected Monday.

A government report showed that personal spending, when stripping out the effects of inflation, stood unchanged in January. The findings arose further concern that consumers are more hesitant to reach into their wallets amid the uncertainties facing the economy.

A parade of economic worries has weighed on consumer as well. The Reuters-University of Michigan final consumer sentiment reading for February came in at 70.8, better than the figure of 69 that had been expected. Still, the index was well off the level of 78.4 seen in January.

Declining issues outnumbered advancers by about 8 to 1 on the New York Stock Exchange, where volume came to 1.76 billion shares compared with 1.46 billion shares traded Thursday.

The Russell 2000 index of smaller companies fell 19.54, or 2.8 percent, to 686.18.

Overseas, Japan's Nikkei stock average closed down 2.32 percent. Britain's FTSE 100 closed down 1.36 percent, Germany's DAX index fell 1.67 percent, and France's CAC-40 fell 1.67 percent.

[denn034]

Three words: Economic Stimulus Package. Don''t worry about it, people!

[byeneocons]

Junior says we''re not heading into a recession. He also says the surge is working, and that sending people a check will fix the economy.

[skyk-2009]

Now don''t you worry folks, that money is going to trickle down to you real real soon... Trust the Republican''s.... I know they''ve promised it to you time after time for 30 years and I know you''ve never seen it yet but Trust them. After all look at all they did for you the 6 years they were in power. How could you ask ANY congress to BORROW more than they did? Problem is they''ve NEVER balanced a Budget, NEVER saw a Surplus... well except for the Balanced Budget and Surplus Bill Clinton handed them that is. Who in their right mind votes to continue this insanity??

[skyk-2009]

Three words: Economic Stimulus Package. Don''''t worry about it, people!


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Posted by denn034 at 04:37 PM : Feb 29, 2008

Three words! Incompetent George Bush! This JERK was handed a government running on a balanced budget and having a surplus. He was TOLD not to do what he did, he did it anyway, and now we can add ONE more lie to the MOUNTAIN of lies he''s told us. Most DISHONEST man on this PLANET!!

[robertr121]

If you''re looking for someone to blame for the mess we find our country in presently, look no further than your bathroom mirror, at that idiot staring back at you and ask yourselves, how could I be so stupid to vote for this moron? Will we ever learn?

[olebd]

What? Stocks are tumbling? Gas is reaching toward $4 a gallon? Most ''mericans aren''t filthy rich thanks to old family money? Huh. I wasn''t aware of that.

[sharncedar]

Actually the stock market is tanking because of the Fed promise to cut rates even more. That makes the "global investor" assume that US assets will lose value as the dollar drops. Thus the voodoo of the past is not working. These guys cannot seem to grasp the new fundamentals of globalization. They do the same old routines from 1940, and the economy is nothing like 1940. The fundamental relationship of interest rates and stimulus packages to economic growth have changed. But the ignorant, paralyzed american leaderhip keeps pushing the "up" button even though its now a "down" button. The elevator goes down, so they push it again. It goes down faster, so they push it harder.

We need to completely replace our leadership with new people.

[alphaa10-2009]

Oil Price Gouging-- 2
Despite deepening recession, the Big Oil lobby displays utter lack of patriotic concern as its relentless price gouging pushes the economy further into distress. Despite getting the huge tax breaks it wanted from congress, it happily gouges the American public exactly when we least can afford it. Not that its older prices were less of a gouge-- Exxon reported $40.6 billion in profits in 2007! Chevron gouged over $18 billion.

While his Big Oil buddies are busy with their fraternity party at consumer expense, Bush would never admit something like a recession happened on his watch-- or that his friends made it worse. To Bush, all the millions of consumer home foreclosures are simply a "market adjustment", and the economy is only "down".

Bush made matters worse with his lack of a rational fiscal policy. Like any credit card debtor in desperate straits, Bush borrows to fend off his creditors. Essentially, Bush has borrowed America into debtor nation status and near-insolvency. Heckuva Job, Bush!

[alphaa10-2009]

killtheliars said, "We need to start using shale oil..."
---
Oil industry boosters always can be counted upon to comment, "But there''s always oil out there, if you''re willing to pay for it!" In this case, above poster offers only another way to pay more for oil, not to mention another way to plunder the West like coal companies strip-mined Appalachia.

The difficulty with any scarce commodity like oil is it rapidly loses commodity. People cannot afford to use oil to run their machines and transportation. The larcenous price of oil is more than a market "fever", it becomes a powerful detriment to economic recovery and growth. All to say, price gouging is more than bad market behavior-- it can kill an economy.
(See next, "Oil Price Gouging"-- 2)

[tburzio]

What if big oil sells our oil to the Chinese, who can afford to pay higher prices then we can? After all, we hate them. What if they say, "Good riddance?"

[byeneocons]

It doesn''t matter. The Neocons will always vote for tax cuts for the rich on the Reagonomics theory that it will all trickle down to the middle and lower classes. Nevermind that it failed under Reagan, Bush 1, and Bush 2.

[jwind11]

oh no the meeting of the minds!! lol, you idiots can''t even pay your bills much less know anything about the stock market....instead of posting here all the time...go get an education so you can get a real job so you can pay your bills.

[bozworth4]

Stop the cycle!!! Draw all your money out of just checking accounts, then maybe the big companies (Government) will see who is really in charge. Problem is after about 3 hours of this money leaving the banks it would have to stop. No cash only in electronic and paper transfers.

[olebd]

It''s a shame he gets to be president one extra day this year. Oh the pain!

[bozworth4]

oh no the meeting of the minds!! lol, you idiots can''''t even pay your bills much less know anything about the stock market....instead of posting here all the time...go get an education so you can get a real job so you can pay your bills.


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Posted by jwind11 at 05:46 PM : Feb 29, 2008
Got me one of them edukashuns. Problem is with all my skuling I stil get talkt to and ritten bout bye pepole who hav all th anzers. N trie two talk over my hed.

[gkc99]

Stock market crash? What happened, did some of Bushit''s Billionaires have to hire some Americans?

[j-whitman]

jwind11,,,,, You get an education, obviously you need it.... These are serious long lasting problems

Stocks fell sharply Friday after a series of depressing economic and corporate reports and high oil prices stoked concerns about the health of the U.S. economy. The major stock indexes fell more than 2.5 percent and the Dow Jones industrials lost 315 points.

Investors were unnerved by disappointing quarterly results from American International Group Inc. and Dell Inc. And an index of regional business activity that Wall Street regards as a good indicator of a broader report set to arrive next week had its weakest showing in more than six years.

[jwind11]

Stock market crash? What happened, did some of Bushit''''s Billionaires have to hire some Americans?

Posted by gkc99 at 05:56 PM : Feb 29, 2008

Yea thats it.....you are a bozo

[bozworth4]

PS gess that''s wye i wurk to jobs. furst is two pay my taxes. secund one duz pay the bils nd xtra stuf. aso teech univercity clases.

[rudy2281]

Who are the ''investors''? Companies-machines-individuals-dogs-cats? Ever notice that no one in the media bothers to sort that out. The investment bank computers could have tripped today?? Pension Fund managers might have sold to improve their cash position?? I don''t believe several million American individuals are sitting at their PC every day, biting their nails and selling billions of shares, and then buying them back the next day.

The news has no value without some descriptive information about ''who'' is buying and selling.

[j-whitman]

jwind11,,,, Can you provide any support that shows gkc99 is a bozo /???

[jwind11]

PS gess that''''s wye i wurk to jobs. furst is two pay my taxes. secund one duz pay the bils nd xtra stuf. aso teech univercity clases.

Posted by bozworth4 at 05:59 PM : Feb 29, 2008

better than living off the government like j-whitman does

[jwind11]

wind11,,,, Can you provide any support that shows gkc99 is a bozo /???

Posted by j-whitman at 06:04 PM : Feb 29, 200

yep, read all his posts

[j-whitman]

jwind11,,,, I suppose you think my military retirement is government welfare ?? ------ What have you done for this country ????

[j-whitman]

jwind11,,,, I do read his posts,,,, The only bozo I see is you

[jwind11]

jwind11,,,, I suppose you think my military retirement is government welfare ?? ------ What have you done for this country ????

Posted by j-whitman at 06:06 PM : Feb 29, 2008

dont you dare put the military into your pathetic group!!!

[jwind11]

jwind11,,,, I do read his posts,,,, The only bozo I see is you

Posted by j-whitman at 06:07 PM : Feb 29, 2008

have you learned to spell yet?

[j-whitman]

jwind11,,,, You are among one of the most dishonorable American Hating posters on this board.

[jwind11]

jwind11,,,, You are among one of the most dishonorable American Hating posters on this board.

Posted by j-whitman at 06:09 PM : Feb 29, 20

i have noticed anyone that complains about your pathetic spelling is a dishonorable american

[walt1944-2009]

THE GREAT BUSH DEPRESSION IS ALMOST UPON US!!!!!
THE GREAT BUSH RECESSION IS HERE FOR SURE!!!!

The Great Emperor Bush is upset about the depressing news from Wall Street concerning the stock market.

Such news reinforces the Great Emperor''s plans to replace the dollar with the new currency he has in mind called "the Bushie". This new currency would be the legal tender of the USSA while the Great Emperor Bush and all his wealthy friends have a huge stockpile of gold, silver, and platinum to fall back on.

The "Bushie" would only be good in the USSA and would be tied to the profits of such MEGA companies as Microsoft, AT&T, DELL, and, of course, BIG OIL! That way, consumers of the USSA would be force to spend every "Bushie" they had to make sure that corporate profits are up and the "Bushie" will still be worth something!

So thinks the Great Emperor Bush II!!!!!

SIG HEIL, BUSH!!!!
sig heil, McCain????

[jwind11]

j-whitman:

political expert, nafta expert, iraq expert, economy expert, but can''t spell for ***.

[j-whitman]

jwind11,,,, It''s not the spelling that''s important, it''s the message ----- As an American, you suck

[jwind11]

THE GREAT BUSH DEPRESSION IS ALMOST UPON US!!!!!
THE GREAT BUSH RECESSION IS HERE FOR SURE!!!!

The Great Emperor Bush is upset about the depressing news from Wall Street concerning the stock market.

Such news reinforces the Great Emperor''''s plans to replace the dollar with the new currency he has in mind called "the Bushie". This new currency would be the legal tender of the USSA while the Great Emperor Bush and all his wealthy friends have a huge stockpile of gold, silver, and platinum to fall back on.

The "Bushie" would only be good in the USSA and would be tied to the profits of such MEGA companies as Microsoft, AT&T, DELL, and, of course, BIG OIL! That way, consumers of the USSA would be force to spend every "Bushie" they had to make sure that corporate profits are up and the "Bushie" will still be worth something!

So thinks the Great Emperor Bush II!!!!!

SIG HEIL, BUSH!!!!
sig heil, McCain????

Posted by walt1944 at 06:12 PM : Feb 29, 2008

oh joy, mcvets ptsd twin is here

[jwind11]

wind11,,,, It''''s not the spelling that''''s important, it''''s the message ----- As an American, you suck

Posted by j-whitman at 06:13 PM : Feb 29, 2008

you don''t have the knowledge to post anything valid if you don''t have the knowledge to spell simple words genius.

[jwind11]

wind11,,,, It''''s not the spelling that''''s important, it''''s the message ----- As an American, you suck

Posted by j-whitman at 06:13 PM : Feb 29, 2008

and we already know that you hate the americans that went after the american dream and got it. not our fault you didn''t.

[j-whitman]

jwind11,,,, You have yet to back up any of your BS statements with any facts ---- Don''t talk to me about knowledge

[jn122736]

The biggest and most unnoticed lie ever sold to the American voters was/is the fraudulent claim by Reagan, and now Bush, that they were cutting taxes.

The fact is they were simply and knowingly transferring hard earned money from the working class to the elite (top 5%).

Taking the national debt from less than $I trillion to almost $10 trillion since 1980 can hardly be called a tax cut.

The ONLY way that debt can ever be paid is through taxation.

Not only are we now nearly $10 trillion dollars in debt, we have already paid over (accrued) $7 TRILLION INTEREST on the national debt since Reagan started borrowing and spending.

The debt has grown so fast since 2001, when Bush jr. took office, that the interest for 2008 alone will be $.5 TRILLION, and will increase every year until, and unless, the borrowing and spending is halted and the debt paid down.
The interest on the debt now costs more, each year, than the reported annual costs for the Iraq fiasco.

[jwind11]

jwind11,,,, You have yet to back up any of your BS statements with any facts ---- Don''''t talk to me about knowledge

Posted by j-whitman at 06:17 PM : Feb 29, 2008

I have to back up the fact that you can''t spell?

[libsrweak]

jwind11,,,, I suppose you think my military retirement is government welfare ?? ------ What have you done for this country ????

Posted by j-whitman at 06:06 PM : Feb 29, 2008


***************

your military pension IS NOT WELFARE..however RETIREMENT FROM THE MILITARY is not a good reason to hate this country

[jwind11]

jwind11,,,, I suppose you think my military retirement is government welfare ?? ------ What have you done for this country ????

Posted by j-whitman at 06:06 PM : Feb 29, 2008


***************

your military pension IS NOT WELFARE..however RETIREMENT FROM THE MILITARY is not a good reason to hate this country

Posted by libsrweak at 06:18 PM : Feb 29, 2008

he doesn''t hate country, he hates people that can spell and people that have success in life.

[j-whitman]

jwind11,,,, Now you are talking to me about the Great American Dream ???

You want it, go for it,,,,, I''ve been there & done that.. It''s not my dream -- But it''s your GOP who''s the one stopping it for the same Americans who''s backs provided it for you.

[irliberal]

he doesn''''t hate country, he hates people that can spell and people that have success in life.

Posted by jwind11 at 06:20 PM

...and maybe he doesn''t hate anyone, however much you might deserve it.

[jwind11]

You want it, go for it,,,,, I''''ve been there & done that.. It''''s not my dream -- But it''''s your GOP who''''s the one stopping it for the same Americans who''''s backs provided it for you.

Posted by j-whitman at 06:21 PM : Feb 29, 2008

thanks!! as typing this, sitting on deck of my lake house looking over the lake, just cracked open a beer and eating some wings!! is this a great country or what?

[smirk5]

If supply-side economics actually worked, we''d have balanced the budget before the downturn. I thought the tax-cuts would grow us out of deficit. But, the growth never caught up with the extra debt we took on due to the tax cuts. Now, with a recession, we''re going to go even deeper into the hole.

[lovegetpeace]

To any Journalists out there:
Please do not tell Bush that Stocks Plummeted. He would say ''i have not heard that'' since he is thinking about the lucrative money from the private sector he will make after he leaves office on 20-Jan-2009.

[jwind11]

.and maybe he doesn''''t hate anyone, however much you might deserve it.

Posted by IRLiberal at 06:23 PM : Feb 29, 2008

I know, we covered that already, you libs hate people that go out and succeed in life. you had same oppurtunities I did, not mine or Presidents fault that you didn''t make it.

[irliberal]

thanks!! as typing this, sitting on deck of my lake house looking over the lake, just cracked open a beer and eating some wings!! is this a great country or what?

Posted by jwind11 at 06:24 PM

Your beer is Michelob, chicken wings are nasty and the scenery is actually a poster on your mother''s basement wall. But as long as you''re having yourself a good time that''s cool with me. Enjoy. And shower once in a while, okay?

[j-whitman]

jwind11,,, I''m happy you''ve got a lake front house, enjoy it ---- I had a beach house.

[jwind11]

Your beer is Michelob, chicken wings are nasty and the scenery is actually a poster on your mother''''s basement wall. But as long as you''''re having yourself a good time that''''s cool with me. Enjoy. And shower once in a while, okay?

Posted by IRLiberal at 06:26 PM : Feb 29, 2008

ahh jealousy and anger from the losers in life!!! if you are lucky I might hire you to mow my lawn

[jwind11]

jwind11,,, I''''m happy you''''ve got a lake front house, enjoy it ---- I had a beach house.

Posted by j-whitman at 06:26 PM : Feb 29, 2008

Thanks!!!