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STOCKS PLUNGE AS INVESTORS RUN FOR THE EXITS

August 10, 2011 4:23 PM EDT
Stocks were trashed again Wednesday as the negative-feedback loop continues to spiral out of control. Rumors of downgrades in France and major bank losses in the Euro-zone spilled over to the U.S., which is on the verge of its own double-dip recession.

Investors took little solace in the fact that Ben Bernanke and the Federal Reserve are promising some additional quantitative easing measures and wiped-out all of Tuesday's Fed-induced rally. The Jackson Hole meeting on August 26th holds that much more importance now, but investors aren't holding their breath for anything groundbreaking.

The Dow closed down 520 points to 10,720. It was the fifth straight day of 400+ swings, and third straight day of 500 points swings - which saw stocks plunge Monday, jump higher Tuesday, and now plunge again on Wednesday. The volatility and swings seen in stocks is something not witnessed since 2008, in the days following the Lehman Brothers bankruptcy.

The U.S. banking sector was brutalized again as investors worry about hidden balance sheet dangers. Bank of America (NYSE: BAC) fell another 10 percent, despite an attempt by CEO Brian Moynihan to reassure investors on a conference call that all was OK. The Goldman Sachs Group, Inc. (NYSE: GS) also fell 10 percent on fears.

Gold continued to surge and briefly passed the $1,800 level.


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