Stocks Suffer Sixth Straight Day Of Losses
Dow Closes Down 190 Pts. As Wall St. Remains Rattled Despite News Of Emergency Rate Cut
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Traders work on the floor of the New York Stock Exchange, Wednesday, Oct. 8, 2008. (AP Photo/Richard Drew)
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An electronic screen at the Nasdaq MarketSite shows the decline in the Dow Jones Industrial Average at the start of the trading day Wednesday, Oct. 8, 2008 in New York. (AP Photo/Mark Lennihan)
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A man looks through the windows of the Nasdaq MarketSite Wednesday, Oct. 8, 2008 in New York. (AP Photo/Mark Lennihan)
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Kuwaiti traders follow the Stock Exchange downturn in Kuwait on Wednesday, Oct. 8, 2008. Kuwait's official news agency says Wednesday the country's central bank has cut the discount rate by 1.25 percent to 4.5 percent to increase liquidity and boost confidence in the falling stock market. (AP Photo/Gustavo Ferrari)
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A television screen at the New York Stock Exchange shows the decision of the Federal Reserve to lower interest rates, Wednesday Oct. 8, 2008. (AP Photo/Richard Drew)
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Play CBS Video
Video
World Markets Slash Rates
Interest rates have been reduced dramatically across many major financial markets, as authorities scramble to halt a potentially devastating economic disaster. Charlie D'Agata reports from London.
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Video
U.K. Banks Get Bailout
The hint of a Fed rate cut did nothing to stop the pain in U.S. markets while the U.K. decided to bailout its banks, reports Richard Roth. Maggie Rodriguez talks to Fox Business News' Alexis Glick.
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Video
Small Businesses In Crisis
A San Francisco business is forced to lay off some workers in order to make payroll, just one of many across the U.S., reports John Blackstone.
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Photo Essay
Down In The Slumps
Traders, brokers, investors react as world financial markets slide.
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Timeline
Financial Meltdown
Track major events that lead to one of the most tumultuous times in Wall Street's history.
The Standard & Poor's 500 index, the market measure most closely followed by traders, fell 1.13 percent - compared to a 3.85 percent slide Monday and a 5.74 percent drop Tuesday. The Dow Jones industrials fell 189 points, a number that while sizeable was less frightening than the 875 it lost over the first two days this week.
Trading was erratic right from the opening bell, after 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 the target for its federal funds rate by a half-point to 1.5 percent from 2 percent, 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.
Investors had been hankering for a rate cut, and they were clearly happy with the central banks' actions. However, they were also aware that in the near term, the credit markets remain tied up because banks are reluctant to lend.
"The financial institutions are having an anxiety attack," Stuart Hoffman, an economist at PNC Financial, told CBS News. "In and of itself [the rate cut] won't be enough, but it's part of a lot of stuff the Fed has thrown on the wall to see what sticks."
That mix of emotions had the major indexes wavering between gains and losses until Paulson in late afternoon financial markets remain severely strained. He also said it would be several weeks before the government's $700 billion financial rescue plan makes its first purchases of banks' troubled mortgage-backed assets.
Paulson's comments showed how vulnerable the market is, and how it can shoot up or down in minutes. The S&P 500 index, up more than 20 points at 3:35 p.m. EDT, tumbled to a loss of 11 by the 4 p.m. closing bell.
"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."
Meanwhile, the Federal Reserve agreed to provide insurance giant American International Group with a loan of up to $37.8 billion, on top of one made to the troubled company last month.
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 alone, the Dow has lost 1,067 points, or 10.3 percent. It has lost 1,592.56, or 14.68 percent over the past six sessions.
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.
Recession worries are hitting retailers as well, reports CBS News business correspondent Anthony Mason. Three out of four major retailers reported disappointing sales.
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.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.



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See all 98 CommentsWALL STREET IS IN A FREE FALL!!!!!
There is no new CREDIT DERIVATIVES bubble that is big enough to replace the one backed by the world wide housing bubble.
It''s over, accept reality and get to work on a new global credit system based on national soveriegnty not ''globization'' and ''central banking systems''.
Stocks Fluctuate On News Of Global Interest Rate Reductions
Maybe in normal times but not this time around it is heading down and will most likely fall for the next few days (I hope that is all it falls). We may see an up but don''t ralley and start going crazy you need to wait there are no bargins do not listen to those who are telling you there are bargins. They want to sell to you so you absorb their loses.
http://burgess.house.gov/News/DocumentSingle.aspx?DocumentID=103976
Brad Sherman in the house of Representatives says members of congress were threatened that "There would be martial law in America if we voted no."(on the bailout bill) Have you heard this in the nws? No?
The Fed can cut to zero, and it will not help. Banks aren''t lending to each other, because they all know that they all are corrupt liars, and low interest rates won''t change that.
It is almost funny that the only obvious answer is exactly the one everyone on both sides of the aisle will not discuss.
There is a time limit, if no one will discuss the solution, expect riots and general anarchy to begin next summer. Once they start, that will be all she wrote.
For those of you who have IRAs outside your place of employment, I want to share some information that I learned from Chase earlier this week. There is a 60 day window that you''re granted where you won''t incur a penalty if you sell your present IRA and transfer that money into another bank''s IRA. Based on that information and as a result of present market conditions, I sold all my stocks that were in separate funds in my IRA. I will be truthful; I did incur a loss. Nonetheless as a result of the continuing downward spiral that I witness in the market and in spite of the fact that these CEOs received the $850 billion that they''ve all been crying for, I decided that the benefit of selling my IRA and leaving my money in an insured institution for 60 days to actually see where this market is headed in the next two months far outweighed the loss that I incurred. I guess what I''m trying to say here is the administration continues to say not to panic, however I feel that with the daily news filled with examples of corporate corruption, I''d rather sit tight for 60 days with cash in hand and watch where the market is truly headed instead of losing my entire IRA.
to afford what I didn''t have then
and wasn''t able to afford !!???
SCARY, MAN, SCARY !!!
http://www.youtube.com/watch?v=EcZSh1diQRQ
All the experts say short-selling''s okay for the market, but it does tend to add volatility to the market - you think that explains the wild swings we''ve had all day? If so, maybe the fact that anybody''s buying for any reason maybe offsets that?
Who knows . . . hmmm . . .
http://burgess.house.gov/News/DocumentSingle.aspxDocumentID=103976n
Brad Sherman in the house of Representatives says members of congress were threatened that "There would be martial law in America if we voted no."(on the bailout bill) Have you heard this in the news? No?
1 : The betrayal of a trust : treachery
2 : The offense of attempting by Overt acts to overthrow the
government of the state to which the offender owes allegiance
ECONOMIC STRIFE
That is Being used as a Weapon to
ELIMINATE a DEMOCRACY and REPLACE IT
With The Totalitarian Dictatorship of
A NAZI FASCIST RULE
(Master-Slave Mentality)
Against : The Populace of the United States
Any Corporation or POLITICAL INFLUENCE
That has Supported and Assisted in
The Achievement of : PURPOSELY and INTENTIONALLY
DESTROYING : The DEMOCRATIC INFRASTRUCTURE and
The ECONOMIC INFRASTRUCTURE of The United States
Is an : Act of TREASON
The Political Criminal FBI
Out of an Act of : Political Nepotism - Patronization and
Fraternization to : The Bush NAZI Fascist Crime Regime
Refuses to Understand or Comprehend
Definition of : TREASON
Posted by jamesm12341 at 01:27 PM : Oct 08, 2008
Have you ever read a histroy book or do you get all your talking points from Limbaugh.
In the great Depression no one was spared. And in this day and age the whole world is watching there is no escape. So why don''t you pick up a 8th grade history book and read about it. If you haven''t finished the 8th grade find a 6th grade one it has lots of pictures in it too.
All this printing worthless paper money will not solve anything. All of these greedy parasites and ticks must be taken down with their own greed.
If you are smart you should''ve been out of the ''dollar'' and been out of stocks and been out of the U.S. before this depression swallows you whole.
Giving banks tax money will help the banks, but it won''t save the economy because it will cause inflation and destroy your investments. Bailouts are the worst possible thing to do for the ordinary citizen because they suffer from it.
There is no way to prevent the depression. The economy has to correct somehow and something has to give. The tax payers are being set up to take the fall while the rich get richer on their backs. Congress is the stooge for the rich and they are selling you out.
Anyway, BoFA went down too, here is their day:
BAC Bank Of America Corporation (NYSE)
Last: $21.95 Chg: ($1.82) %Chg: -7.66%
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Posted by Inketolstoy
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They all went on to careers in flipping real estate.
THERE ARE NO BARGINS OUT THERE AT THIS TIME.
Wait for the market to settle down, make certain that the government controls are in palce. If not through yor money out the window it would be a better investment than giving it to Wall Street.
The time is now.
Davis took Freddie''''s cash through August of this year.
Period.
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Posted by gun-tower
====================
Thats OK, he is a republican. We must be patriotic and look the other way at this for the countrys sake.
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Posted by RUREADY2REVO
==========================
We are being truthfully represented. Most of us are self centered morons, thats all.
Paulson doesn''t want to talk about the hugely risky and largely unregulated derivatives securities bankers drew up after making home loans, that overleveraged those loans by factors as high as 37 to 1. These they traded all over the world, trillions in ''vapor money'' infecting every bank in the world. All housing had to do was catch a little cold, and this derivatives house of cards was going to come crashing down, taking our lending industries with it. Since this industry is ''too big to fail'' (too important to our economy to be allowed to fail), government HAD to bail them out. Lets be clear about what happened: bankers overleveraged mortgages into global investments because they KNEW the worst that would happen would be that the U.S. gov''t (and others) would HAVE to bail them out if their bets didn''t pay off. Lack of regulation allowed them to do that, not faulty mortgage loans. And the housing bubble never popped, it hissed a little, causing the DERIVATIVES bubble to POP, and THAT is what we are rescuing.
Posted by jamesm12341 at 01:27 PM : Oct 08, 2008
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Thats right James, the republicans who get in trouble will do the honorable thing and stand on the streetcorners with their hand out expecting their fellow man to take care of them. just like last night some guy asked me for $1 for gas and I asked him who he is voting for and he said McCain and then I gave him $5.
Maybe if the Republicans did not have that record of lying people would be able to trust them.
News Advisory
FOR IMMEDIATE RELEASE
Contact: Ryan Mehta, 408-348-0681, rmehta@votenader.org (National HQ); Josh Starcher, 718-909-6343 (Local)
WHEN: Wednesday, October 15 at 6:00pm
WHERE: Cooper Union, 7 East 7th St. at Third Ave. NY, NY 10003
Ralph is the only Presidential candidate who supports jail time, not bail time for Wall Street fat cats, so come hear him speak in the historic Cooper Union instead of watching the game show debates on TV. Ralph will address the crowd on serious issues like withdrawing our corporate and military forces from Iraq and more lighthearted, entertaining subjects such as strengthening shareholder power and taxing derivative speculation.
Attorney, author, and consumer advocate Ralph Nader has been named by Time Magazine one of the "100 Most Influential Americans in the 20th Century." For more than four decades he has exposed problems and organized millions of citizens into more than 100 public interest groups advocating solutions. He led the movement to establish the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the Consumer Product Safety Commission, and was instrumental in enacting the Safe Drinking Water Act, the Motor Vehicle Safety Act, the Freedom of Information Act (FOIA) and countless other pieces of important consumer legislation. Because of Ralph Nader we drive safer cars, eat healthier food, breathe better air, drink cleaner water, and work in safer environments. Nader graduated from Princeton University and received an LL.B from Harvard Law School.
News Advisory
FOR IMMEDIATE RELEASE
Contact: Ryan Mehta, 408-348-0681, rmehta@votenader.org (National HQ); Josh Starcher, 718-909-6343 (Local)
WHEN: Wednesday, October 15 at 6:00pm
WHERE: Cooper Union, 7 East 7th St. at Third Ave. NY, NY 10003
Ralph is the only Presidential candidate who supports jail time, not bail time for Wall Street fat cats, so come hear him speak in the historic Cooper Union instead of watching the game show debates on TV. Ralph will address the crowd on serious issues like withdrawing our corporate and military forces from Iraq and more lighthearted, entertaining subjects such as strengthening shareholder power and taxing derivative speculation.
He will also comment on the Presidential debates from which he was excluded. In another part of the city, while Ralph speaks in Cooper Union, the two corporate candidates will be debating each other without even mentioning the issues that Ralph will talk about and that matter to the American people.
***Listen to Nader before you decide***
Ralph Nader is on TV tonight!
Ralph will be on CNN''s Late Edition with Wolf Blizter at about 5 p.m. EST this afternoon.
And he''ll be on Fox''s The O''Reilly Factor with Bill O''Reilly at about 8:25 p.m. EST tonight.
Hope you get a chance to watch.
Posted by lochlan at 12:31 PM : Oct 08, 2008
So does this mean that this time they can shoot looters?
Republicon greed seals the deal.
It always leads to Democrat wins, the Repugs know we always clean up their enormous messes...
The article about AGI sending all its executives to a health spa and spending in excess of $400,000 on them two days after The Bush administration gave them an 85 billion dollar bailout is truly an eye opener.
It shows that today''s economists are the true alchemists by turning something worth less than dirt (debit) into gold, and its all on the world''s investors dime. Good scam. Kudos.
I seriously wonder whether Paulson''s doing more damage than good when he talks.
If you listen to all the other economic experts on tv, they''re so careful about couching everything in optimism to not spook the markets - when Paulson talks the market loses like 250 pts.
Like yeah unemployment''s up, sales are down, credit''s tight, housing''s in a slump, inflation might go up, but still . . .
If you will still be able to afford to support yourself after the business you work for folds under,
If you have all the insurance you need for you and your loved ones,
If your home is paid for and is still worth what you paid for it,
If you are secure with the future as far as your retirement,
If you are not concerned with the amount of taxes you pay,
If your credit rating is over 750,
and If you do not care at all about those who are less fortunate than you,
If you feel comfortable about "Bomb Bomb Bomb IRAN",
If you look forward to a Nuclear war with KOREA,
Then you might be able to afford to vote REPUBLICAN.
Here is your sign
_________
|***VOTE***=
|*McSame!*=
|_________=
| ||
| ||
| ||
I am giving my vote to "THAT ONE"
Since then McCain''s positions on the economic crisis have been erratic at best.
This is no suprise from McCain as he is quoted as saying:
"I don''t understand how the economy works"
Posted by lochlan at 12:31 PM : Oct 08, 2008
So does this mean that this time they can shoot looters?
In Brad Sherman''s District? W. LA ? Sure. But then again it sounds like Sherman is just trying to build a cover story. How did this Cali. Lib. vote on the Bailout?
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