Stocks Dive On Global Recession Fears

Wall Street Joins World Markets In Selloff As Dow Plunges 300 Points

(CBS/ AP)  Wall Street capped another difficult week with steep losses Friday, sending the major indexes to their lowest levels in more than five years as markets around the world skidded lower on the belief that a punishing economic recession is at hand.

It was a dramatic, fractious day on the Street, with the Dow Jones industrials falling more than 500 points soon after trading began and, following the pattern of recent sessions, recovering ground only to fall sharply again. They ended the day with a loss of 312.

The pullback on Wall Street wasn't as steep as some observers had feared after stocks plunged overseas in response to another round of grim corporate news. A profit warning Friday from electronics maker Sony sent its shares tumbling in Japan and offered only the latest example that companies are girding for a slowing economy and a pullback among consumers worried about falling home prices and losses on their investments.

And in Germany, Daimler's stock fell sharply after the automaker reported lower third-quarter earnings and abandoned its 2008 profit and revenue forecast. That followed news in the U.S. late Thursday from Microsoft Corp., which issued a weaker-than-expected forecast for its fiscal second quarter, pointing to the economy.

Whether it's up or down, many traders sense the market is on the verge of a massive move, reports CBS News business correspondent Anthony Mason.

"Something very, very powerful is looming," Arthur Cashin, of UBS Financial Services, told CBS News. "And I suspect what happens over the next five to eight days will be something we talk about for generations."

It is clear that many investors are convinced the world economy is headed for a severe downturn even as governments have raced to jump-start credit markets on the hope that a return of more normal lending levels by banks and other financial houses will fan economic activity.

"People have been saying that we're in a recession. This is the realization," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

But some say the recent pullbacks have been set off by forced selling, keeping some bargain-seeking traders from entering the market.

"There's nothing new going on," said Scott Bleier, president of market advisory service CreateCapital.com. "This is all about the unwinding of massive leverage."

Bleier attributed the declines to margin calls and investors in hedge funds and mutual funds cashing out. A margin call occurs when investors are forced to sell holdings, like stock, to raise cash at the demands of brokers.

"Market participants' fear is not that the economy is slowing," he said. "The fear is there is an endless supply of things for sale, regardless of price."

Steve Gross, principal at alternative investment and advisory firm Penso Capital Markets, said most large hedge funds have already slashed their positions. Instead, he sees a lack of demand: "There are no buyers at all."

Investors were nervous going into the session after U.S. stock futures - the bets traders place on where the market will go - fell so sharply before Friday's opening bell that selling halts were imposed.

Some traders are actually rooting for a washout - a panic driven collapse that will finally find a bottom for this market, from which it can begin to rally back, reports Mason.

By the close, according to preliminary calculations, the Dow fell 312.30, or 3.59 percent, to 8,378.95 after falling 504 in the early going. Still, the blue chips remained above the 8,000 level; at its recent low of Oct. 10, the Dow traded as low as 7,882.51.

Broader stock indicators also fell. The S&P 500 index declined 31.34, or 3.45 percent, to 876.77, and the Nasdaq composite index fell 51.88, or 3.23 percent, to 1,552.03.

Friday's finish was the lowest for the Dow since April 25, 2003, when it ended at 8,306.35. For the S&P, it was the lowest ending since April 11, 2003 when the index finished at 868.30.

The Russell 2000 index of smaller companies fell 18.80, or 3.84 percent, to 471.12.

Declining issues outpaced advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 1.58 billion shares.

Friday was the 79th anniversary of the day that, according to many market historians, the October 1929 stock market crash began. Selling began on Thursday, Oct. 24, and accelerated the following week on the days that have since become known as Black Monday and Black Tuesday, Oct 28 and 29.

For the week, the Dow fell 5.35 percent, the S&P 500 lost 6.78 percent and the Nasdaq fell 9.31 percent.

Gold futures briefly fell to their lowest level in 21 months Friday as the dollar strengthened and the drop in the world's stock markets led investors to sell commodities to offset massive losses in equities. Gold regained much of what it lost later in the day though prices remain down by about 20 percent since the start of the month.

Ordinarily, gold is seen as a safe-haven investment during market upheavals.

The dollar has risen as a safety holding despite fears about the U.S. economy. Investors appear more worried about the stability of emerging markets. That's hurting the euro, for example, because in Europe Iceland, Hungary, Ukraine and Belarus are all in talks with the International Monetary Fund to discuss possible loans. Investors are pulling money out of countries in Latin America and Asia amid worries about vulnerable countries.

Other commodities declined. Light, sweet crude fell $4.21 to $63.63 on the New York Mercantile Exchange. The sell-off, another sign that investors fear a severe recession, came despite OPEC's announcement that it will cut production by 1.5 million barrels a day in a bid to shore up sagging prices.

The pullback in global markets comes ahead of a planned meeting next week of the Federal Reserve's interest rate committee. Policymakers are scheduled to announced a decision on interest rates on Wednesday.

[oneworldusa]

I would be happy if the market went to 2,000.

[patriotic9]

-smSlime, Your just is just full of sh*t: why in such a rich Nation that''''s our; (Actually we are the richest per capita earning Nation on Earth), the rich is not giving to the poor according to the teaching of the Bible, Torah or the Qoran or according to many other ''''Divine'''' Book?

Posted by trishab58 at 10:08 PM : Oct 24, 2008

Dude, you are probabaly unaware of the fact that we supposedly have seperation of church and state in our country.
It is the involvement of religion in our politics which is responsible for all the economical and security crisis we are currently facing.
It is the divine text of bible which asks GOD-NEGLECTED AMERICANS to work day and night to pay tax to the government, and GOD-CHOSEN NON-AMERICANS to snatch more then $3 Billion a year to buy HATRED, TERRORISM and 9/11 against UNHOLY LAND UNITED STATES and GOD-NEGLECTED AMERICANS?
Religion and reasonings are mortal enemies though!
Why didn''t we help Arabs in the destruction of Israel on the Palestinian land, far away from the Concentration Camps in Germany to enjoy oil in cheap prices, which is the backbone of our economy?
Why did we support the occupation of Palestinian land by those EUROPEAN INVADERS who were brought into Palestine after WWII to occupy the land of those Palestinians who can''t even speak the language spoken by Hitler, in order to buy HATRED, TERRORISM and 9/11?
Again, religion and reasonings are mortal enemies!

[whitemale08]

WE''VE BEEN IN RECESSION!!!!

HOW CAN YOU ''FEAR RECESSION'' WHEN IT''S ALREADY BEEN HERE???

YOU CAN''T FEAR SOMETHING THAT''S ALREADY HAPPENED TO YOU!!!!

Good grief.

[tapsettle]

Wow, the stocks are diving anyway even after america threw money at the problem. Their only other solution to problems is to throw bombs. I wonder which stock market will get hit first?

[on_alert247]

The more Wall Streets Dives, the more the Republican Party will Dive which is OK with me.

Posted by lovegetpeace at 06:26 PM : Oct 24, 2008

Apparently you don''t have a family to feed. Your ideological leanings are pretty clear.

[zertrat]

The tip story is such a pile of ***. Made up just like the chick who stupidly put a B backwards on her face. The tip story also has the backwards B in a couple of places -- can you spot ''em? Yep, you can. Yes, this is just another wannabe trying to make a point about global economics based on his really heavy decision at a cheap restaurant. The story demeans restaurant servers, who would give money to the homeless, and exposes our storyteller as a silver-glitter suit-wearer stiffing the folks working to make his lunch a nice experience. The word Loser has never been more appropriate.

[smclimans]

Today on my way to lunch, I passed a homeless guy sitting
on the sidewalk with the extra advertisement
"Vote Obama, I need the money".
I laughed.

In the restaurant,
the waiter had an Obama ''08 button with his Obama necktie.
Again I laughed.

When the $12 lunch bill came, I explained to the waiter
that I was testing the Obama wealth redistribution concept.
He stood there, dumbstruck and MAD, as I told him I would be
giving his tip to the homeless guy outside who needed it more.
The waiter trotted off pissed, while the homeless guy
was thrilled that he receieved money he didnt EARN!

Just a short lesson in Obama socialist economics.
Great story, huh? (and true) just happened
Try it yourself in the next few days!


ANYONE WHO THINKS I WAS BEING MEAN,

I got the "spread the wealth" idea from OBAMA

[gramto8]

Let''''s see: Barney Frank, Chris Dodd, Demtard majority congress...you can do the math I''''m sure! McCain warning demtard congress of impending banking crisis long before it became reality - demtard congress sticks head in sand for POLITICAL reasons, yet claim to be the party that cares - FN CLASSIC!!!!

Posted by pelosilover at 02:06 PM : Oct 24, 2008


McCain had no part in constructing the bill to stop sub-prime mortgages. It was created by Chuck Hagel, Elizabeth Dole and John Sununu. McCain tacked his name on as a co-sponsor ten months after it had been killed in committee.

http://tinyurl.com/3hry3m

The financial companies ghettoed the housing industry. Unsecured loans were the fake crack. Selling it abroad was the safe way to not get caught. Fake insurance helped sell the fake loans.

The dope boys turned loan officers continue to outsmart the system. In an act of insanity the dumbest president ever to live forks over 700 billion dollars to the industry that perpetrated the fraud in the first place. Other banking systems see fake dope(loans) being rewarded and rush to pressure their governments into following suit. The markets seeing stupid written all over the move ... tank.

The answer is not to get the fake crack(loans) off the street. The answer is to round up the fake loan dealers and put them in jail. Markets will respond positively when the cause of the problems are locked away ... not before.

Unsecured big ticket loans were bundled and sold abroad. Did the companies selling these loans know they were worthless ... absolutely. The evidence ... to help sell the loans the companies came up with a new instrument (supposedly in case the loan went bad). The new instrument ... a type of insurance ... helped sell the bad loans abroad.

To make the case ... we already know what happens to an economy under pure capitalism. Take inner city crack dealers. As long as there is product there is demand ... too much demand. Eventually someone runs out of product(crack) and starts selling soap. Low and behold it sells just as well. The only problem ... "its not crack" and someone gets mad enough to start leaving bad crack dealers laying around. The "market" regulates itself.

[hsinco-2009]

It''''s a rediculous argument whether Obama would be good for our economy or McCain. The damage caused by Republicans seems to be irreversible catostrophy. We are going towards military and financial bankrupcy following Iraq invasion.

15 out of 19 9/11 hijackers were from Saudi Arabia.

People who convinced us to invade Iraq were Saudis including Saudi Ambassador to the United States, Prince Bandar Bin Sultan.

The country benifited the most due to increase in the oil prices following Iraq war is Saudi Arabia.

The country benifited the most politically, following Iraq invasion is Iran, whose Ayatollah''''s appointed leaders got power in Iraq.

Nobody ever helped Islamic Radicals more then their psychotic Christian Radical brothers in the United States.

Posted by patriotic9 at 07:28 PM : Oct 24, 2008

I agree! Well said.

[patriotic9]

Posted by patriotic9 at 07:28 PM : Oct 24, 2008

Americans are paying the price for creating and the continuous UnConditional Support for the State of Israel since May 5, 1948. My respect to them for hating us to the end.

Posted by lovegetpeace at 07:51 PM : Oct 24, 2008

I am glad to see that there are still some smart and open-minded people like you in our nation who are not in the state of denial.

I don''t mind anybody following whatever religion he or she chooses as far as they impose thier religious belief on themselves and don''t violate our constitution by bringing it into politics.

If Europeans were not brought into Palestine after WWII to occupy the land of those Palestinians by force who had nothing to do with the actions of Hitler, because bible said so, Alqaeda would not get enough recruits to fly planes into buildings since koran said so.

Religion was used as a tool to fool the people of the United States. It was the job of GOD-NEGLECTED AMERICANS to work day and night to pay $3 billion a year from their tax money to GOD-CHOSEN NON-AMERICANS in order to buy HATRED, TERRORISM and 9/11 against GOD-NEGLECTED AMERICANS and UNHOLY LAND UNITED STATES.

I still remember the verdicts of those Evengalists who were predicting 2nd coming of Christ and the battle of Armagaddon following Iraq invasion.

Now we face real Armagaddon in the Wall Street!

[lovegetpeace]

Posted by patriotic9 at 07:28 PM : Oct 24, 2008

Americans are paying the price for creating and the continuous UnConditional Support for the State of Israel since May 5, 1948. My respect to them for hating us to the end.

[patriotic9]

I am praying hard to God that Wall Streets will dive to 1000 points on November 3, 2008.

Posted by lovegetpeace at 07:07 PM : Oct 24, 2008

Did prayer ever cure any amputee?

It''s a rediculous argument whether Obama would be good for our economy or McCain. The damage caused by Republicans seems to be irreversible catostrophy. We are going towards military and financial bankrupcy following Iraq invasion.

15 out of 19 9/11 hijackers were from Saudi Arabia.

People who convinced us to invade Iraq were Saudis including Saudi Ambassador to the United States, Prince Bandar Bin Sultan.

The country benifited the most due to increase in the oil prices following Iraq war is Saudi Arabia.

The country benifited the most politically, following Iraq invasion is Iran, whose Ayatollah''s appointed leaders got power in Iraq.

Nobody ever helped Islamic Radicals more then their psychotic Christian Radical brothers in the United States.

[lovegetpeace]

I am praying hard to God that Wall Streets will dive to 1000 points on November 3, 2008.

[lovegetpeace]

The more Wall Streets Dives, the more the Republican Party will Dive which is OK with me.

[lovegetpeace]

Posted by DcratLosers at 05:35 PM : Oct 24, 2008

President Bush has finished the job for Obama by Socializing the Banking, Insurance and Investment Industries. Also, there are reports of the administration discussing nationalizing Auto Industry such as GM. Even if Obama wishes to socialize this nation, there is very little left to socialize. So, do not worry.

[lovegetpeace]

The only reason USA got rich in the last century was because USA was an Economic Monopoly around the world. After WWII, all world economies were in Ruins and Destroyed except for the USA Economy. Consequently, everyone around the world had to purchase from America at our High Asking Price.

Today, nobody needs to purchase from USA as USA got absolutely no monopoly. Instead, Americans must now compete headon with the rest of the world.

If Americans were so smart back then, why are they so Idiots today?

[abnerm-2009]

Every time the polls show Obama moving up, the markets head down. Did anybody notice this pattern? It is obvious that the market is responding the likely Obama election. You still have time America. Take uncertainty away by rejecting Obama. The stakes are just too great (retirement, borrowing money, way of life, etc)

[usadvisor101]

republican donators like ken lay ran enron,not clinton...evil men like fastow,lay,fuld(lehman bros) are diehard repugnirants !!

REPUBLICANS RAN THE COMPANY!
Posted by usadvisor101 at 03:26 PM : Oct 24, 2008

But Clinton ran the country, including the federal agencies that were supposed to audit and detect the RAMPANT ACCOUNTING FRAUD that was taking place in MANY COMPANIES during the "dotcom boom."

Clinton let them play - Bush busted them.

IT''''S THAT SIMPLE.

Posted by txgrouch2007 at 03:53 PM : Oct 24, 2008
+ report abuse


exactly when and how did bush bust them?

you keep ignoring the fact that pro republicans ran all the failed companies and you *** well know they did!

the men taht ran those companies are at more fault then anyone else,including even bush,who was in office when they all failed! or clinton if you want to believe that!


It happened on bush''s watch,not clintons.

also bush has always been anti-regulation and "free market principles"


so what has bush done about fuld taking 498 million in stock before the collapse of lehman?? how do you think fuld voted for?


paleeeeze !!