Stocks Skid On Economic And Carmaker Angst

Dow Sinks Almost 300 Points As Weakening Economy, Automaker Talks Worry Investors

(CBS/ AP)  Investors around the world are betting that even with government stimulus and bailout programs, the global recession will just have to run its course.

The problems that slammed stocks last year - ailing banks, foundering automakers, tumbling home prices and cash-strapped consumers - haven't let up. Instead, the issues have festered, and are threatening to push U.S. stocks back to levels not seen since the late 1990s.

As Obama signed his $787 billion stimulus bill and automakers scrambled to come up with restructuring plans, the Dow Jones industrial average closed down 297.81 points, or 3.79 percent, at 7,552.60 - just 31-hundredths of a point above its post-meltdown Nov. 20 close of 7,552.29, which was its lowest close in five-and-a-half years.

One big worry on Wall Street is that General Motors Corp. and Chrysler LLC might not be able to prove by Tuesday's deadline that they can repay billions of dollars in loans and return to profitability. GM has already received $9.4 billion from the government, and could get another $4 billion if the Treasury Department signs off on its viability plan. Chrysler has borrowed $4 billion, and is seeking another $3 billion.

A person briefed on the negotiations said General Motors Corp. and the United Auto Workers were getting close to an agreement on concessions required as part of the company's government loans.

The drop on Wall Street, which followed sharp pullbacks on overseas exchanges, brought the Dow within 102 points of the five-year trading low of 7,449.37 it reached last November, when investor sentiment was also sliding. The Standard & Poor's 500, index which fell 37.67, or 4.56 percent, to 789.17, came with 48 points of its 11-year low of 741.02.

With the way the market has been trading, those milestones could be breached in one or two sessions.

"We don't think the recession's over until at least the middle of the year, and that's even starting to seem very early," said JPMorgan equities anayst Thomas J. Lee, adding that the market's worries are "nothing new - the magnitudes are worse."

The stock market is usually regarded as a forward-looking mechanism, but Lee pointed out that about one-third of the time, the S&P recovered around the same time as the economy.

"I'm tilting toward thinking we're going to have lows in mid-July," Lee said. "In the meantime, we're stuck in a range."

Wall Street is waiting for more specifics from the government on its various efforts to more adequately assess when to expect growth again. Obama is scheduled to discuss a program Thursday on preventing foreclosures, but investors are particularly anxious for details from the Treasury Department about its new rescue plan for the troubled banking sector.

Over the weekend, a meeting of Group of Seven finance ministers failed to produce any specific steps to revive the global financial system, either.

"The government has their hand on the tiller. They're steering. And that's the problem - the markets are not confident the proper course has been set yet," said Henry Herrmann, chief executive officer at investment management firm Waddell & Reed.

The Nasdaq composite index fell 63.70, or 4.15 percent, to close at 1,470.66.

The decline in U.S. stocks occurred alongside a retreat in markets overseas. Japan's Nikkei stock average fell 1.4 percent; Britain's FTSE 100 fell 2.43 percent; Germany's DAX index fell 3.44 percent; and France's CAC-40 fell 2.94 percent.

[gce65]

Stocks are not the economy!
(Not that the economy is doing well either)

[libra217]

He''s in office only 3 weeks and adds $2 trillion to the national debt

Posted by swin5 at 06:30 PM : Feb 17, 2009

How exactly do you figure that ? The only spending bill Obama has signed is for $787 billion. Surely you''re not holding Obama responsible for Bush''s actions?

[swin5]

When you come down to it, the stock market is the closest thing we have to an unrigged public vote on the health and future of the country''s economy, and after Geithner''s debacle last week and Obama''s show today, it appears that the market has voted ''No Confidence'' in the Obama administration.

[smt451d]

Stop calling them automakers. They don''t make anything. They''re professional beggars.

[m-e-t-w-o]

Hacker1100 big law firms hammered they need every thing they get and a hell of a lot more

[rm090213]

And the Democrats are cheering.
Posted by DemWatcher at 09:15 PM : Feb 17, 2009

Democrats HATE THE USA.

And they are ALLERGIC TO FACTS!!!

One of them actually posted that it''s GOOD for the economy if the stock market goes down.

You just can''t reason with people like that.

[demwatcher]

The people and corporations that have the money and create the jobs, and the people that invest in the economy know that this is not just a bad piece of legislation, it is a TERRIBLE piece of legislation.

A 4 percent drop in just a day. And the Democrats are cheering.

[rm090213]

OBAMAAAAAAAA!!!!!

[edintex]

I dont care HOW much of a discount Chrysler or GM offers on ANY of their cars/trucks, I would NEVER buy from them while not being assured that I can get warranty service (and you would need it if you own one of theirs) five or more years down the road.

You''d have to be a real sucker to buy from them now, even WITH more good government money given after the bad money they already gave.

The U.S. would get more bang for our bucks if they just let the automakers fail and just hand over the bailout money directly to the workes.

[credibility2]

Ah yes, don''t blame the consumer and hold them accountable for using their own intelligence, maturity and free will. If a person can''t pay for something, or over extends themselves with credit, or hasn''t any intention of paying off the debt they incurred, they and they alone are to blame for their financial distress. No, let''s blame every one else and allow the deadbeat to once again be given a pass and allowed to not have to be forced to accept any personal responsibility of accountability for their actions.

[c0nsc10u5_1]

Our current economic crisis is more than the housing market...it is the direct outcome of our society''s system of debt. We''re a material society that uses debt to enslave the masses so that we can work to fill the pockets of those who run big business.

Its a cycle in which the consumer is passed along to each industry to fill the pockets of a few greedy people. Think about it...the second we turn 18 they give us credit so that we can go out and buy a whole bunch of stuff we have no need for b/c the media portrays the "American Dream" as a consumption of material items that have no direct correlation to happiness.

First, the media makes money from introducing all of these goods and services to the public so we run out and accumulate debt along with the stress that comes with it (with the financial industry reaping the direct benefits of our debt known as interest). While the drug, alcohol and tobacco industries reap the benefits of our stressed filled lives, by offerring goods that allow us to temporarily escape them. Meanwhile, law and medical practices reap the benefits off of our reactions to stress and/or the use of drugs, alcohol, and tobacco.

We as a society have been duped all along by big business to buy all of the things they manufacture that we don''t need. Nothing is more demonstrative of this idea than the consumer electronics industry(think HDTV''s, cellphones, ipods, and BluRay). We don''t need a bailout...we need to rethink our entire debt system.

[brainteaser2]

Why are investors "concerned over the auto industry." I think any idiot could see this was a dying duck from the start. We have given GM money for a re-structuring and all they come up with are more truck commercials trying to sell us just what we don''t need - gas guzzling dinosaurs. It appears the partys over for everyone except Ford.

[jetranger7]

Wall Street is a Joke, nobody should pay attention to those fraudulent crooks anymore !!!

[swin5]

The market crashes, comes back up a bit, stabilizes for a short time, then begins a long descent into the abyss. 2009? Nope - 1929-1930 - look it up. A nation now nearly $13 trillion in debt will not solve its problems by going further into debt. The market has voted and the market has spoken - Obamanomics will lead us into the next Great Depression - by this summer everybody will know it - Donald Trump knows it now.

[swin5]

The problem is not that union workers are making too much - it''s that after Reagan, Bush, Clinton, and Bush 2 there simply aren''t enough union workers left - union workers don''t make too much, everybody else is making too little - which could have been predicted back in the days when we allowed the wealthy class to begin to de-industrialize the country, destroy the middle class, and ship all jobs overseas - all so that they could maximize their share of the nation''s wealth. We have the largest concentration of wealth in this nation''s history - what does that tell you? And you are doing exactly what they want you to do - fight over the crumbs they throw you instead of voting to put an end to their aristocracy.

[kirkoh]

Turn off conservative republican radio and the market would probably see a steady improvement. As to the big 3, they''ve been failing for years. Unions are one of the biggest problems.

Without them UAW making serious concessions there is NO way GM or Chrysler can come close to meeting the requirements by our government in restructuring. Personally speaking i think they should let them go under for the sole fact that life is about learning from the mistakes we make and moving forward vs just keep on making them over and over and let the government bail them out.

[swin5]

To ExAF74

Sorry, but I wanted to give Ron Paul a chance - not this flub-a-dub. He''s in office only 3 weeks and adds $2 trillion to the national debt - Just how much more chance do you want to give him? I can''t afford anymore of his chances - I''ve already lost about $8000 in investments because of him and then he adds another $8000 of government debt on my shoulders - but of course, he wants to give me a $400 tax cut - how nice!

[swin5]

I know this may sound draconian, but we need to save what''s left of our manufacturing ability and our union and middle class jobs. So I propose that we stop importing ALL foreign made automobiles until our domestic automakers return to profitability.
This will include cars sold by the Big Three but not made in America. This will not include vehicles primarily made in America or Canada, even if owned by foreign companies. Also, I propose that ALL autos made in America, regardless of ownership, be made exclusively of American made materials. If we can''t get it through our thick heads that we are on the verge of a major major collapse and that severe measures that do not involve government spending are needed like, yesterday, then say goodbye to what''s left of our economy. And screw all those countries crying about protectionism - they''re just out to protect themselves and the only country that has ever really practiced free trade is the United States - much to our detriment.

[exaf74]

Any time Obama or one of his cronies either opens their mouths or signs something, I lose money.


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Posted by swin5 at 06:14 PM : Feb 17, 2009

This was the same whining when boy george was in office. BULLFUNKY! GIVE PRESIDENT OBAMA A CHANCE!!!!

[exaf74]

Why do Recons all want to lie when they come in here. You all act like the people that frequent this room do not know what the hell is real.
The stock markey has fluctuated since it bottomed during bush''''s last days. If you are going to post at least post the truth.


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Posted by demswin08 at 05:40 PM : Feb 17, 2009

THANK-YEW!!!!!