Dow Slices Through 9000 As Investors Panic
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Stocks continued to get slammed today as investors grow increasingly worried that the credit crunch will hit the real economy hard. The Dow dropped 678 points, or 7.3%, to 8,759. The most widely followed index has now lost nearly 5600 points or over 39% in the last year. The S&P 500 fell 7.6% today to 910, down 42% over the last year. The Nasdaq fared a little better today, falling 5.5% to 1,645. The Nasdaq is down 41% over the last year.
Showing the increased fear among average investors, data from Morningstar today showed that investors pulled a record $43.5 billion from US-managed stock funds and $28.8 billion from bond funds during the month of September.
Dow component General Motors (NYSE: GM) fell an amazing 31% today to $4.76 per share, its lowest level since 1950 on worries about the company's cash condition and the ability of car buyers to access loans. Late in the day, Standard & Poor's placed GM's ratings on CreditWatch with negative implications. The firm said, "said GM currently has adequate liquidity for at least the rest of 2008 as measured by cash balances and available bank facilities, but the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009."
In another attempt to stop frozen credit markets, the U.S. Treasury signaled they may begin injecting capital directly into U.S. banks within weeks, in return for common or preferred shares. This is a change from the original strategy to use the $700 billion strictly for buying troubled mortgages on the book of banks. The Treasury still plans to buy the assets, but injecting capital directing into the banks could be a more immediate approach.
Insurance stocks were hit hard again as investors worry about their investment portfolio due to the rocked markets: XL Capital Ltd. (NYSE: XL) fell 53%, Prudential Financial (NYSE: PRU) fell 23% and Hartford Financial (NYSE: HIG) fell 19%.
Showing the increased fear among average investors, data from Morningstar today showed that investors pulled a record $43.5 billion from US-managed stock funds and $28.8 billion from bond funds during the month of September.
Dow component General Motors (NYSE: GM) fell an amazing 31% today to $4.76 per share, its lowest level since 1950 on worries about the company's cash condition and the ability of car buyers to access loans. Late in the day, Standard & Poor's placed GM's ratings on CreditWatch with negative implications. The firm said, "said GM currently has adequate liquidity for at least the rest of 2008 as measured by cash balances and available bank facilities, but the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009."
In another attempt to stop frozen credit markets, the U.S. Treasury signaled they may begin injecting capital directly into U.S. banks within weeks, in return for common or preferred shares. This is a change from the original strategy to use the $700 billion strictly for buying troubled mortgages on the book of banks. The Treasury still plans to buy the assets, but injecting capital directing into the banks could be a more immediate approach.
Insurance stocks were hit hard again as investors worry about their investment portfolio due to the rocked markets: XL Capital Ltd. (NYSE: XL) fell 53%, Prudential Financial (NYSE: PRU) fell 23% and Hartford Financial (NYSE: HIG) fell 19%.
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