Dow Falls Off A Cliff

679-Point Stock Swoon Pushes Blue Chip Index Below 9,000 Mark For First Time Since 2003

(CBS/AP)  A runaway train of a sell-off turned the anniversary of the U.S. stock market peak into one of the darkest days in Wall Street history Thursday, driving the Dow Jones industrials down a breathtaking 679 points and deepening a financial crisis that has defied all efforts to stop it.

Stocks lost more than 7 percent, $872 billion of investments evaporated, and the Dow fell to 8,579. When the average crashed through the 9,000 level for the first time in five years in the final hour of trading, sellers had only begun to hit the gas pedal.

As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.

"Right now the market is just panicked," said David Wyss, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."

It all took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.

Paper losses for the year add up to an staggering $8.3 trillion, according to figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.

It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.

Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis - considering seeking an equity stake in major U.S. banks in order to stabilize them.

But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.

Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said President George W. Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.

"In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can," said Sung Won Sohn, an economics professor at California State University, Channel Islands.

After the closing bell, shellshocked traders and bankers gathered at Bobby Van's Steakhouse and downed beers and drinks to chase the ghastly numbers. One Wall Streeter joked things had gotten so bad that he should apply for a job as a waiter.

"It was an ugly day, there's no ways to put it," said another customer, Alan Valdes, director of floor operations for Hallard, Lyons. "Guys were frustrated, just fed up. ... We're in an area no one has been in since 1930."

Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday's sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.

General Motors stock fell below $5 a share today - a level not seen since the 1950s, reports CBS News business correspondent Anthony Mason. Just last month, GM produced a video to reassure investors.

For the Dow, it has been nothing short of a free fall:

The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.

The point decline Thursday was the third-worst in Dow history. The worst, 778 points, came less than two weeks ago.

Of the last 19 trading days, there have been 11 triple-digit losses - including the unprecedented six straight. The six gains have all been triple-digits, and only one of them was enough to make up the losses of the day before.

The Dow now stands only about 1,300 points above its lowest close of the bear market that followed 9/11. In a market as volatile as this, that gap can be closed in a couple of trading days, or less.

In fact, triple-digit declines can happen almost in an instant.

On Thursday, the Dow was above 9,200 after 1:30 p.m. and still above 9,000 after 3 p.m. The pressure to sell was so intense that the Dow kept dropping precipitously for 10 minutes after the 4 p.m. closing bell as the day's losses were tabulated.

In percentage terms, the drop in the Dow exceeded the day the markets reopened after the Sept. 11, 2001, terrorist attacks. It was not close to the 22.6-percent decline on Black Monday in 1987, the last stock market crash.

Still, it is becoming increasingly clear that Washington has ever fewer places to reach in its toolbox to stop, or perhaps even slow, the crisis. Among the options still left are buying up foreclosed properties and making direct loans to homeowners, both of them hard for free-market supporters to swallow.

"There is a lot of uncertainty as to exactly how long this situation persists and what exactly will get us out of this in terms of the financial markets and, therefore, their effect on the economy," Dean Mackey of Barclay's Capital told CBS News.

Speaking in the afternoon before the market closed, President Bush told an audience on the South Lawn of the White House that the economy was going through a "very tough stretch." But, he said: "I'm confident in our economy's long-term prospects."

After the market closed, the White House said Americans should remain confident despite the market plunge, and Bush planned to speak from the Rose Garden on Friday morning - though he was not expected to unveil any new policy proposals.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asked Bush on Thursday to call an emergency meeting of the G-8 industrial nations' heads of state to address the continuing global credit freeze and instability in world markets. The G-8 comprises France, Germany, Italy, Britain, Japan, the United States, Canada and Russia.

In the markets Thursday, the broader stock indicators registered similar declines to the Dow's. The Standard & Poor's 500 index fell 7.6 percent to the 909 level, and the Nasdaq composite index fell 5.5 percent to 1,645.

Meanwhile, the credit markets remained stubbornly locked-up. The benchmark rate that banks charge each other for loans, known as Libor, rose to 4.75 percent from 4.52 percent a day earlier, signaling banks are still afraid to make loans because they worry they won't be paid back.

"The story is getting to be like that movie Groundhog Day," said Arthur Hogan, chief market analyst at Jefferies & Co. "Everything we're seeing is historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It's not the kind of history you want to be making."

Adding to Wall Street's nervousness, a ban on short selling - a process in which investors borrow shares of stock and essentially bet the value will fall - expired.

With three and a half weeks before voters elect Bush's successor, there was also no immediate comment on the Wall Street action from the presidential candidates, Democratic Sen. Barack Obama and Republican Sen. John McCain.

Earlier in the day in Dayton, Ohio, Obama took aim at McCain's plan to have the government absorb the full cost of renegotiating mortgages for borrowers under strain from the dramatic decline of the values of their homes.

McCain rolled out the idea at the second presidential debate earlier this week, a forum in which he also told voters it was important to have a steady hand in the White House during a time of economic crisis.

[generey]

Oh dear...we might see 8000 today.

[generey]

Check out some of these stocks; Ford & GM are pooping bad, BoFA is sliding down as well.

Symbol Last Chg % Chg Delete
AAPL 91.96 +2.17 2.42%
MSFT 23.60 0.59 2.57%
GOOG 342.22 4.11 1.22%
INTC 16.88 0.63 3.88%
GE 20.23 -0.42 -2.03%
XOM 73.39 -3.61 -4.69%
F 2.41 -0.25 -9.40%
GM 5.77 -1.14 -16.50%
SIRI 0.47 0.01 2.20%
CSCO 18.11 -0.23 -1.25%
Apple Inc

[ghosttownsky]

How does short selling of stocks benefit the process where people can buy a share of large companies? I studied how the stock market works in college but that question was never answered beyond being a way for investors to make money based on a company%u2019s stock value going down. It also allows brokers to make their commissions. How does that fit in to the concept of spreading ownership? Betting on a company doing worse seems to be a self fulfilling prophecy. Shouldn%u2019t that be done in Las Vegas?

[ajaxtheleast]

Just another Thursday bell Curve

turning into a Friday night

Used Beer Curve.

[downtowner97]

The national debt, thankfully, is not a problem. The "World Bank" is actually a branch of the US Treasury Department. Others owe us more than we owe others. We have loaned money, at interest, to most of the countries in the world.

The fact that the Federal Reserve is run by a few rich families, and not the government, is scary in some ways. The good thing is, the Federal Reserve IS run by a few families, and not our government. Our government only cares about surviving until their terms are up. The Rothschilds, Rockefellers, DuPonts, and Morgans have families, children and grandchildren in the US, and they intend to keep this country strong.

Don''t panic. It''s all under control.

[upto1947]

Jobless claims drop from 7-year high. This is a lie. They make the numbers look GOOD by not counting people who run out of unemployment benefits

[downtowner97]

Look at how the world''s markets respond to ours. If our market went down, while the Asian and European markets went up, it would be time to panic. The World Bank is owned by Americans. Everyone owes the World Bank money. Our economic hit men have made sure of that. Even Saudi Arabia owes us huge amounts of money.

Think of the world economy as a football game. When it snows, it snows on both teams. The men on the field are all cold. They all slip. They all have trouble seeing the lines on the fields. The game is still fair. That''s what''s happening. All markets are going down in tandem.

Retirements are shrinking, but goods will become less expensive. As soon as the panic subsides, all boats will rise.

[lloydbest1]

Posted by fervan at 01:51 PM : Oct 09, 2008

And thus a new boom/bust cycle begins. The whole point to regulatory processes and oversight - which were pretty much put to sleep during Bush''s watch - is to level out the "highs" and backstop the "lows". I wouldn''t have any objections to buying equities whose prices have fallen into the john, but I would be very nervous about borrowing money to do so...

"Others owe us more than we owe others. We have loaned money, at interest, to most of the countries in the world..." Posted by downtowner97 at 01:56 PM : Oct 09, 2008

I''m not so sure - at least about the part where we have more money owed to us than we owe. The United States has been, for years, one of the world''s biggest debtor nations. One of the reasons the crash of our own financial structures has spread to a worldwide panic is the fact that no one has much confidence America is able, let alone willing, to pay its own obligations.
We will be a looooong time coming out of the hole we are now in.

Posted by Upto1947 at 01:56 PM : Oct 09, 2008

A rule of thumb when looking at unemployment figures during bear market times is multiply the official umemployment rate by 2.5 to get a true number of employable adults not now working. 6.1 is the last unemployment figure I heard. If that rule holds, "true" unemployment is somewhere around 18 percent. It doesn''t look good.

[stevemccoy7]

If Bush-Paulson is Bad, Obama-Frank-Dodd-Pelosi-Reid Will Be Worse

[max0010]

Risky, erratic, and uncertain is what Obama calls helping out the home owners....he knows it will not work. He knew that the surge in Iraq would not work and waved the white flag of surrender. Go away Obama. America take back your country and get busy with the repairs.

[hatesthecolt]

Risky, erratic, and uncertain is what Obama calls helping out the home owners....he knows it will not work. He knew that the surge in Iraq would not work and waved the white flag of surrender. Go away Obama. America take back your country and get busy with the repairs.


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Posted by max0010


Take BACK the country? Absolutely we need to take BACK the country from the dangerous fiscal policies of the deregulating Republican slimeballs. Obama, please HELP~!

[yeswecan09]

I found a good way to stop the headaches from the stock market.

Step 1: Find a desk

Step 2: ::headdesk::

Step 3: repeat

[yongamerica]

hen the DOW gets in the 6000''s, then prices will begin to reflect their true value.

[random_radar]

"If Bush-Paulson is Bad, Obama-Frank-Dodd-Pelosi-Reid Will Be Worse

Posted by stevemccoy7 at 02:56 PM : Oct 09, 2008"

You already have Bush-Paulson-Obama-Frank-Dodd-Pelosi-Reid. They all worked together for a bipartisan deal to skrew the citizens. Its just that a whole bunch of citizens are too stupid to see that both parties are working together to skrew them.

Party loyalty is a peculiar blindness afflicting 99% of America. But that just means America deserves the destruction they brought on themselves.

[variant_530]

Hatesthecolt - The financial system was never deregulated due to extra conditions imposed by your democrats for fairness to lenders. In fact it was the democrats that insisted that loans be available for all disadvantages individuals (AKA Low income)regardless of their ability to repay.
Review who signed the Financial Services Modernization Act of 1999 that would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933 -- It was your beloved President Clinton.
The problem is eventhough the intent was to promote deregulation of the financial industry the democrats and their do good for all policies ruined it by forcing regulation.

[p94932-2009]

there''s been a great disturbance in the force . . .

obi wan kenobi

[gop_will_win]

Close to -500 now. Its an orderly decline.

[gop_will_win]

Anyone own GM stock? You got royally reamed today.

It''s down, so be it. I''ve been buying on the downside for the last two weeks, I''ll take some profit and hold other stocks.

Being a bottom feeder right now works great.

Ever think if the press just shut up for a few days instead of speading doom and gloom, it might help.

Same with all the BS from the government "experts" just take a few days shut up, let the money begin to flow let the market sort itself out.

When the market turns (and it will) there will be money made.

[gop_will_win]

-646 now

Anyone own GM stock? You got royally reamed today.


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Posted by GOP_WILL_WIN at 03:46 PM : Oct 09, 2008

Do and no, with what I bought at the low today there is only 30 cents difference between my average buy and the low. It may be bumpy but it will rise.

[gop_will_win]

It''''s down, so be it. I''''ve been buying on the downside for the last two weeks, I''''ll take some profit and hold other stocks.

Being a bottom feeder right now works great.

Ever think if the press just shut up for a few days instead of speading doom and gloom, it might help.

Same with all the BS from the government "experts" just take a few days shut up, let the money begin to flow let the market sort itself out.

When the market turns (and it will) there will be money made.




--------------------------------------------------------------------------------

Posted by rickwar
===================
You are not what I would call a bottom feeder. The word I would use is bagholder.

[closethippy1]

The moment is about to come, everyone better get ready.
When the Dow Jones hits 6660.00 get on your knees and pray hard for your salvation.
He will return to take his children home, to take them to the new Jerusalem.

[gop_will_win]

GM is now $4.75 a share.

[strangeworld]

Hey McCain, still think that the economy is fundamentally strong? *** republican greed.

[gop_will_win]

Do and no, with what I bought at the low today there is only 30 cents difference between my average buy and the low. It may be bumpy but it will rise.


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Posted by rickwar
=======================
Did you get it under $5?

GM is now $4.75 a share.


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Posted by GOP_WILL_WIN at 03:53 PM : Oct 09, 2008

actually 5.18

[rights4all]

The SEC chief should be fired.
He knew the weakest sector was Financial and shorts were waiting to pounce on these weakened companies. Yet he did not extend the short selling ban.
This just accelerates the downfall.

[gop_will_win]

DON''''T HOLD ON TO YOUR STOCKS,HOLD ON TO YOUR SOCKS!!


--------------------------------------------------------------------------------

Posted by Hacker11001
========================
I have only one stock, QID and its doing quite well during all of this.

[strangeworld]

Perhaps when the elderly are standing in the soup line they''ll figure out that the BJ that Clinton got wasn''t such a big deal when compared to the economic collapse that the republicans caused with their deregulation and greed over the last eight years. Vote the republicans out!

[gop_will_win]

actually 5.18


--------------------------------------------------------------------------------

Posted by rickwar
========================
$4.80 now. Dont you get real time quotes Mr Livermore?

[max0010]

world. www.citizenwells.wordpress.com

Obama giving instructions to Odinga (his cousin) on winning the "power"

[closethippy1]

I feel like going out and start looting stores. Does anyone want to come along?

[downtowner97]

Where is the calming voice of our president?

[downtowner97]

In 26 days, attention will once again be focused on Bush.

[gop_will_win]

The SEC chief should be fired.
He knew the weakest sector was Financial and shorts were waiting to pounce on these weakened companies. Yet he did not extend the short selling ban.
This just accelerates the downfall.


--------------------------------------------------------------------------------

Posted by rights4all
=====================
Its people pulling out of their mutual funds now.

[closethippy1]

"Bye-bye, miss american pie.
Drove my chevy to the levee,
But the levee was dry.
And them good old boys were drinkin%u2019 whiskey and rye
Singin%u2019, "this%u2019ll be the day that I die.
"this%u2019ll be the day that I die."

[gop_will_win]

-675.97.

[generey]

Where is the calming voice of our president?


--------------------------------------------------------------------------------

Posted by downtowner97 at 04:01 PM : Oct 09, 2008

LOL, boy george wil be on the news & he will reassure us all that everything will be ok! (They gave another $35B to AIG today!).

Gawd I love the pics of the traders!

Where is the calming voice of our president?


--------------------------------------------------------------------------------

Posted by downtowner97 at 04:01 PM : Oct 09, 2008

Busy puking over the can because he now knows what his legacy will be. He wanted one he got it. War, Economic Collapse, disaster handling disasters, a total and complete failure in every area. Followed by McSame and "in the dark" airhead Palin.

[downtowner97]

I was being sarcastic when I said "Where is the calming voice of our president?" He is hiding behind the smoke cloud of the election, but in 26 days, all eyes will be focused on him.

[noloyalisti]

I hate to be happy about this, but this is the only thing the ignorant, stupid American people understand.

Did they get upset when two elections were stolen or they lied us into a war for oil? Did we protest when they illegally spied and tortured or stacked the courts with right wing activist judges?

Maybe now we can recognize the fascist movement that has taken over the US.

[generey]

I feel like going out and start looting stores. Does anyone want to come along?


--------------------------------------------------------------------------------

Posted by closethippy1 at 03:59 PM : Oct 09, 2008

Already got my targets picked out!

[gop_will_win]

Let us all be thankful for our maldistribution of wealth.

Its people pulling out of their mutual funds now.


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Posted by GOP_WILL_WIN at 04:05 PM : Oct 09, 2008

Sure, pull out at the bottom, fear and panic reign.

was being sarcastic when I said "Where is the calming voice of our president?" He is hiding behind the smoke cloud of the election, but in 26 days, all eyes will be focused on him.


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Posted by downtowner97 at 04:09 PM : Oct 09, 2008

Got it from the start:) just fueling it

[antoniof123]

Dow Falls Off A Cliff

GOP see any chance of wining go down the drain.

LOL it just gets funnier and funnier with that bunch. They really beleive the spew they put forth.

[gop_will_win]

I was being sarcastic when I said "Where is the calming voice of our president?" He is hiding behind the smoke cloud of the election, but in 26 days, all eyes will be focused on him.


--------------------------------------------------------------------------------

Posted by downtowner97
=========================
Whats being sarcastic?

[fedupfinance]

All the kings horses and all the kings men couldn''t put it together again.

[gop_will_win]

Sure, pull out at the bottom, fear and panic reign.



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Posted by rickwar
=======================
Why do you blame them? They want to keep what they have left. Me I pulled most of my stock holdings months ago and only kept QID which is an ultrashort fund.