NEW YORK, Oct. 27, 2008
Stocks Give Up Early Gains
Volatile Session Ends With Last-Minute 200-Point Loss For Dow
-
Play CBS Video Video Credit Default Swaps Steve Kroft examines the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis.
-
The gyrations in U.S. stocks have been sizable since the market's peak a year ago. (AP Photo/Richard Drew)
-
Timeline Financial Meltdown Track major events that lead to one of the most tumultuous times in Wall Street's history.
-
Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
The Street's back-and-forth was typical for a volatile market that has seen many recent rallies evaporate — particularly as hedge and mutual funds are forced to sell off even strong assets so they can meet investors' demands for their money back.
Alfred E. Goldman, chief market strategist at Wachovia Securities, said the market's late drop — which was particularly intense — after an earlier rally also reflects investors' ongoing uncertainty about the direction of the economy.
"We were trading higher earlier on very light volume, but the buyers just couldn't gather enough momentum to keep it going," he said. "When confidence is razor-thin, the nervous tension goes way up and bam, the sellers take over."
"It's just an overall malaise about how bad the economic slump is going to be globally," he said.
Banks got a boost earlier in the session after the Treasury said it signed agreements with nine financial institutions to buy stock in the companies this week. An upbeat home sales report also gave the market support until late afternoon.
The waffling in the market came amid light trading volumes ahead of possible interest rate moves from central banks — including the Federal Reserve, which is set to begin a two-day meeting Tuesday. The Fed is expected to lower its fed funds rate by a half-point to 1 percent on Wednesday. Investors are also optimistic that the European Central Bank is moving toward its own cut after President Jean-Claude Trichet said Monday such a step was "a possibility."
But while policymakers around the world have been trying to find a remedy for the fear of bad debt that has paralyzed parts of the credit markets in the past month, lending conditions have eased only slightly. Investors are worried that a drop-off in lending has damaged the economy.
The U.S. government is taking some of its first steps to steady the banking sector. The Treasury said it signed agreements with nine banks and will buy stock in the companies this week. The proceeds from the stock sales are intended to bolster the banks' balance sheets so they will begin more normal lending.
"Clearly, what's most important is that the funding crisis needs to be contained at this point," said Chris Orndorff, director of equity strategy at Payden & Rygel in Los Angeles. "The banks need to start taking on some more risks," he said. "I think it's going to take months."
According to preliminary calculations, the Dow fell 203.18, or 2.42 percent, to 8,175.77 after earlier rising 220 points.
Broader stock indicators showed even more sizable losses. The Standard & Poor's 500 index fell 27.85, or 3.18 percent, to 848.92, and the Nasdaq composite index fell 46.13, or 2.97 percent, to 1,505.90.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment See all 23 Comments
- These people do not have the money to pay investors back someone will be left holding the empty bag.
- Reply to this comment
- I think someone shot the bull it is almost time for the fat lady to sing. Get out now take what you can and get out it''s going down within one month Big time. At 50 trillion dollars in money swaps it is going to go .under
- Reply to this comment
- I think someone shot the bull it is almost time for the fat lady to sing. Get out now take what you can and get out it''s going down within one month Big time. At 50 trillion dollars in money swaps it is going to go under.
- Reply to this comment
- I think someone shot the bull it is almost time for the fat lady to sing. Get out now take what you can and get out it''s going down within one month Big time. At 50 trillion dollars in money swaps it is going to go under.
- Reply to this comment
- I think someone shot the bull it is almost time for the fat lady to sing. Get out now take what you can and get out it''s going down within one month Big time. At 50 trillion dollars in money swaps it is going to go under.
- Reply to this comment
- Ha! HA! HA! Ha! HA! You poor republicans, Sarah Palin has sold her skins for some TV time.
www.chilitoz.com is reporting that Sarah Palin has signed a deal with PlayBoy Magazine to posed partially exposed in a future release of the famous nudity magazine in exchange, Heffner will run a multi-million dollar anti Obama add a day before the election. - Reply to this comment
- Ha! HA! HA! Ha! HA! You poor republicans, Sarah Palin has sold her skins for some TV time.
www.chilitoz.com is reporting that Sarah Palin has signed a deal with PlayBoy Magazine to posed partially exposed in a future release of the famous nudity magazine in exchange, Heffner will run a multi-million dollar anti Obama add a day before the election. - Reply to this comment
- on the last stimulas pkg. That could have gone a long way toward getting some alternative energy set up such as wind or solar or getting the price of electric cars more affordable to buy. It would cost the consumer the equivalent of 60 cents per gallon to charge and drive an electric car. Why doesn''t our country invest in getting us out of this mess instead of their quick fixes that don''t work? Just read a fascinating book The Manhattan Project of 2009 by Jeff Wilson . Every member of congress to read this book too, and fast! www.themanhattanprojectof2009.com
- Reply to this comment
- frankistage, ...... the DJIA faltered badly during the election fight in FL between Bush and Gore, and that was a runup to the Dot Com bubble burst.
- Reply to this comment
- What was the DJIA when Bush won in 2000?
- Reply to this comment
- It ALL happened on the BU$H WATCH...
Posted by inventagod2 at 04:45 PM : Oct 27, 2008
We''re you saying that when the market hit 14,000? - Reply to this comment
It ALL happened on the BU$H WATCH...- Reply to this comment
Ha! HA! HA! Ha! HA! You poor republicans, Sarah Palin has sold her skins for some TV time.
www.chilitoz.com is reporting that Sarah Palin has signed a deal with PlayBoy Magazine to posed partially exposed in a future release of the famous nudity magazine in exchange, Heffner will run a multi-million dollar anti Obama add a day before the election.- Reply to this comment
- What''s that trickling down? Not money? Edward 1975 has it right. The Reagan trickle down hasn''t happened yet. The Bush II trickle down, well, that ain''t money you smell folks.
- Reply to this comment
- xmas1225 you got it wrong. Obama was arguing against using the courts to redistribute wealth. All of you anti-tax Republicans are hypocrites. I have been hearing the no-tax line from the Republicans for 40 years. It is pure bull. Here are the results; Ronald Reagan largest deficits in history; George Bush "no-new taxes" Senior - record deficits and raised taxes; Bill Clinton budget surplus and economic prosperity; George Bush Jr - record deficits and worst economic crisis since the great depression. Alan Greenspan said he was wrong about regulation. McCain said he did not understand economics and the economy was sound. The Republicans are economic morons. Their save the rich and big business at all cost has crashed our economy. It''s the deficits that have tanked the dollar. Anybody that believes the Republicans know what they are doing with the economy must have brain damage.
- Reply to this comment
- Don''t worry Wall Streeters, there''s another 700 billion of the taxpayers money that can be used to save your sorry butts. Funny that the economy, or at least 70% of it, is driven by consumer actions, yet we are not the ones they are giving the money too. Had they given the monies to the taxpayers, businesses and banks would have had capital from the clearing of debt and spending that the consumers would have done.
- Reply to this comment
- The guys I work with have a great betting past time.. We bet on the market ticker being either up or down. Then we bring up this CBS web sight and either collect or pay. We do this about 5 times a day. I''m ahead but only by a couple of bucks. Only fun left in this ugly time for the market..
- Reply to this comment
- Headline:
Obama polls up, Wall street bets on dim future for American business ! - Reply to this comment
- Let wall street fall they should have kept the money no bailouts it''s going to fall anyway. Let the people that made the bets loose not the American tax payer
- Reply to this comment
- McCain/Palin however, want to fix the steam engine before the whole train derails, give it a tuneup, and get it back out there ASAP, working more efficiently.
Posted by standlee5 at 10:52 AM : Oct 27, 2008
Dumb Analogy... - Reply to this comment
