10/9/2008 : Market Panic

Oct 9th, 2008

Source : Google Finance
From AOL Money & Finance :

Thursday's sell-off came as Standard & Poor's Ratings Services put General Motors Corp. and its finance affiliate GMAC LLC under review to see if its rating should be cut. The action means there is a 50 percent chance that S&P will lower GM's and GMAC's ratings in the next three months. GM has been struggling with weak car sales in North America.

It's the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent. The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

U.S. stock market paper losses totaled $872 billion Thursday and the value of shares over all has tumbled a stunning $8.33 trillion since last year's high. That's based on figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks and represents almost all stocks traded in America.

S&P also put Ford Motor Co. on credit watch negative. The ratings agency said that GM and Ford have adequate liquidity now, but that could change in 2009.

GM, one of the 30 stocks that make up the Dow industrials, fell $2.15, or 31 percent, to $4.76, while Ford fell 58 cents, or 22 percent, to $2.08.

Photo by ABC News

From Bloomberg, Oct 9 :

The government is planning to buy stakes in a wide range of banks within weeks as the credit freeze increasingly threatens to tip the U.S. economy into a deep recession.

Treasury Secretary Henry Paulson and top aides are still considering options on how the purchases would work, including having the government acquire preferred stock, two officials informed of the matter said.

A $200 billion to $300 billion figure would probably pay for minority stakes in U.S. banks not on the brink of failure, according to estimates by Duke University finance professor Campbell Harvey in North Carolina.

As a credit freeze sends rates on loans between banks soaring, the world's biggest economies are stepping up efforts to prevent a financial meltdown. In the U.K., Prime Minister Gordon Brown is engineering a 50 billion pound ($87 billion) program that partly nationalizes at least eight British banks. He's also enacting other measures to help the banking system.

Paulson and Federal Reserve Chairman Ben S. Bernanke will meet with their counterparts from the Group of Seven major industrial nations tomorrow in Washington.

See the chart below, the Dow has plunged by -1746.19 points (-16.91%) for the fourth straight days this week. While S&P 500 off -189.31 points (-17.22%) and Nasdaq off -302.27 points (-15.52%).

In the last two weeks :

Dow : -2563.94 (-23%)
S&P 500 : -303.09 (-24.98%)
Nasdaq : -538.22 (-24.65%)

In the Black Monday Crash on October 19th, 1987, 21 years ago; The Dow plunged 22% in the intraday trading.



In the next morning, Oct 10th, 2008. Nikkei index down more than 7 percent in early trading.


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5. 10/08/2008 Market Recap: Almost a reversal day

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