NEW YORK, Nov. 5, 2008
Post-Election Blues Sink Wall Street
Dow Falls Nearly 500 Points, More Than Erasing Tuesday's Gains
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Play CBS Video Video MoneyWatch Even a historic election couldn't help Wall Street, as stocks fell and investors remain worried about the failing economy.
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The major stock indexes fell more than 5 percent on Wednesday, as investors weighed the election of Barack Obama and turned their attention back to the foundering U.S. economy. (AP Photo/Mark Lennihan)
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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 market was expected to give back some gains after a six-day run-up that lifted the Standard & Poor's 500 index more than 18 percent. But investors lost some of their recent confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings.
"I think what is happening in the market is a continuation of really the last few weeks," said Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto. "The markets are still incorporating the slowdown in the global economy."
Worries about the financial sector intensified after Goldman Sachs Group Inc. began to notify about 3,200 employees globally that they have been lost their jobs as part of a broader plan to slash 10 percent of the investment bank's work force, a person familiar with the situation said. The cuts were first reported last month. Goldman fell 8 percent, while other financial names like Citigroup Inc. fell 14 percent.
Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.
Although the market expected Obama to win the election, as the session wore on investors were clearly worrying about the weakness of the economy and pondered what the Obama administration might do to help it.
Obama will inherit an enormous budget deficit when he is sworn in Jan. 20. Analysts said the market is already growing anxious about who Obama selects as the next Treasury Secretary, as well as who he picks for other Cabinet positions.
"A lot of the policy going forward is going to have an effect on the various sectors of the market," said Joe Keetle, senior wealth manager for Dawson Wealth Management.
Obama's victory means that industries such as oil and gas producers, utilities and pharmaceuticals may face greater regulation and even taxes, while labor unions and automakers are expected to benefit.
In addition, banks, insurance companies, hedge funds and the rest of the financial sector will almost certainly face attempts at a regulatory overhaul by the Democratic Congress next year.
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Analysts said investors were also uneasy in advance of the Labor Department's October employment report, to be issued on Friday. Economists on average expect a 200,000 drop in payrolls, according to Thomson/IFR. Employers have been slashing jobs after a freeze-up in the credit markets crippled many companies' ability to get financing.I think what is happening in the market is a continuation of really the last few weeks. The markets are still incorporating the slowdown in the global economy.
Subodh Kumar, Subodh Kumar & AssociatesLate-day selling by hedge funds helped deepen the market's losses during the last hour. More selling by the funds is expected to weigh on the market ahead of a Nov. 15 cutoff for shareholders to notify fund managers of their intent to cash out investments before year-end.
According to preliminary calculations, the Dow fell 486.01, or 5.05 percent, to 9,139.27.
The S&P 500 index fell 52.98, or 5.27 percent, to 952.77. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.
The Nasdaq composite index fell 98.48, or 5.53 percent, to 1,681.64, while the Russell 2000 index of smaller companies fell 31.33, or 5.74 percent, to 514.64.
By AP business writers Sara Lepro and Tim Paradis
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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See all 61 Commentswhy are still letting the credit card companies over charge..everone.. in 1920 the usa went changed our money system to a false system...(and unconstitional) this one of the real big reason we have a money problem.. and big government waste in so may ways....
but i guess if you had strong usa money system then i would be hard to have one world goverment..if that is
what we want ????
sorry ... the billion references should be trillion.
[Posted by renrivers at 07:44 PM : Nov 05, 2008]
where has all the money been coming from for all the spending that gwb signed off on for the last eight years?
in 2001 - deficit for the annual budget
in 2002 - deficit for the annual budget
in 2003 - deficit for the annual budget
in 2004 - deficit for the annual budget
in 2005 - deficit for the annual budget
in 2006 - deficit for the annual budget
in 2007 - deficit for the annual budget
in 2008 - deficit for the annual budget
in 2009 - deficit (projected) for the annual budget
national debt has been increased nearly 100% during the gwb reign ... from roughly 6.5 billion ... to 10.5 billion.
why is the issue of how you''re going to pay for anything suddenly an issue for you now?
Regulating corporate greed and spending tax monies wisely will be hard on all of those who profited over the past eight years, but in the long run it should turn out to make a better and stronger America.
It''''s just a little harbinger of what Obama will do to this nation.
http://in.reuters.com/article
/usMktRpt/idINN0531971420081105
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Posted by HawkSprings at 09:19 PM : Nov 05, 20
idiots like you will ALWAYS blame troubles on the new guy. H-ell, he hasn''t even taken office yet! why don''t you blame the criminal(s) that are still in office??
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Posted by rudy654
there were rules made during the Clinton years that said banks had to give a certain number of "sub prime" loans (ie risky loans). The result was twofold. 1. Millions of people were able to buy homes for the first time, the housing industry mushroomed. 2. Wall Street came up with an ingenious way to "protect" itself from these risky loans. It all fell apart when that "ingenious protection" failed and Wall Street couldnt cover its losses.
I find fault with everyone. The politicians for the rules, the people for taking out loans they couldnt cover, and the banks for covering it up with the mortgage protection insurance that wasnt good enough.
We all pay.
Posted by dkhorse1
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Five of a kind (5 supreme court) beats one ace (Clinton)
Isnt it funny that cBSnews cant bring themselves to tell you that this is the WORST DOW Jones loss in history for the day after a presidential election.
Not as funny as the fools that pushed stocks up 16% over the past 10 days when all economic indicators point to the worst recession since Ronald Reagans recession in the early 1980''s.
It''s just a little harbinger of what Obama will do to this nation.
http://in.reuters.com/article/usMktRpt/idINN0531971420081105
Posted by thcarson at 08:27 PM
I went and got a loan for a new car last week. Interestingly, the loan officer knew everything about me and I didn''''t have to think up anything. It''''s all bullkrappp if you think that poor people pulled the wool over these financial institutions.
Posted by rudy654 at 08:31 PM : Nov 05, 2008
Bullkrappp doesn''t even begin to cover it. If you go into a bank here, it is just like you said, rudy. When they bring your name up on the computer, they can see everything about you. There is no way that a bank or anybody should be taking the borrower''s word for how much money they make, or owe.
It is horrifying that they have gotten away with this cr*p!
talking precludes walking,,,,,,,,validation is in the jello....this is gonna be fun....looks good on paper,,,,,whooda thought?.....if anythings gets bumpy,,out,comes those skeletons that not so suprisingly just seemed to be ignored,,,,,,,if they would have spent half the effort they did on mud wrestling poor ol sara on Bay rock,,,,,cheez TMZ would have shut down all operations,,,just to watch......oh well, it all comes out in the wash,,,,I always root for the winner,,,,afa all,,,he shoe is the boss mann,,,,,,,he on probation for 2years and than the senate will shaken up,,,,just the way it gooessss....boyz n the hood,,,,,holden on to street creds.....till than....
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Posted by rudy654
It was in the New York times written by George Mason University economics professor Tyler Cowen. I''m not saying who''s fault it is but people need to take responsibility for their actions also.
Blame him all you want, if that makes you less likely to face the reality of the world you helped create.
Posted by rudy654
Isn''t that a typical liberal response. Pray tell what did I do to create it, I was not in congress nor the senate, and had nothing to do with the bills being passed, in fact, I wrote Obama, my senator, and ask him not to vote for the bailout. Also I never voted for the Republicans now in office either, so pray tell how is it my fault?
By the way, have you noticed how far you have went from answering my original question? You have slammed and degraded me, just as I said you would. and still the question I ask remains unanswered. That should concern you, as much as it does me. The question was, "Where is Obama going to come up with the money to put the programs in place he promised during his campaign?" It was a simple question, I thought, but like so many liberals you want "pie in the sky," on an poor man''s budget.
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Posted by thcarson at 08:27 PM
I went and got a loan for a new car last week. Interestingly, the loan officer knew everything about me and I didn''t have to think up anything. It''s all bullkrappp if you think that poor people pulled the wool over these financial institutions.
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Posted by mr22587 at 08:27 PM
"People is"? Pizz poor grammar. What else?
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Posted by ThatGuy56 at 08:21 PM
With all the reports coming in on job losses and a humongous deficit, I guess you think those things really don''t matter. They''re just nuances to someone like you, aren''t they? Get back under that trailer you live in.
Who forced Enron to extort money from California? Was that also the democrats'''' fault?
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Posted by rudy654
As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications, according to one recent study. The research was done by BasePoint Analytics, which helps banks and lenders identify fraudulent transactions; the study looked at more than three million loans from 1997 to 2006, with a majority from 2005 to 2006. Applications with misrepresentations were also five times as likely to go into default. Many of the frauds were simple rather than ingenious. In some cases, borrowers who were asked to state their incomes just lied, sometimes reporting five times actual income; other borrowers falsified income documents by using computers.
Blame him all you want, if that makes you less likely to face the reality of the world you helped create.
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