"The dawn of the Obama presidency could not shake the stock market from its dejection over the rapidly deteriorating state of the banking industry.to read the rest click here
Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points. Although traders on the floor of the New York Stock Exchange paused to watch the inauguration ceremony and Obama's remarks, the transition of power didn't erase investors' intensifying concerns about struggling banks and their impact on the overall economy. ....
"The reason we're having a panic drop is the fact that Europe is catching our cold, and we could have deeper and deeper problems that could require more and more money. And eventually the government is going to have to stop spending," said Keith Springer, president of Capital Financial Advisory Services. "It's a pretty dangerous situation to be in."
...The Dow Jones industrial average fell 332.13, or 4.01 percent, to 7,949.09, its lowest close since Nov. 20, when the blue chips ended at 7,552.29 -- their lowest point in more than five years. It was also the blue chips' biggest drop since Dec. 1.
During much of Obama's address, the average was down about 150 points. Traders hadn't appeared so focused on TV screens since Sept. 29, when the House initially voted against the banking bailout package and the Dow tumbled 777 points.
The Dow's showing was its worst ever for an Inauguration Day.
Broader stock indicators also fell sharply Tuesday. The Standard & Poor's 500 index fell 44.90, or 5.28 percent, to 805.22, and the Nasdaq composite index fell 88.47, or 5.78 percent, to 1,440.86.
The Russell 2000 index of smaller companies fell 32.80, or 7.03 percent, to 433.65.Losing issues outnumbered gainers by about 9 to 1 on the New York Stock Exchange, where consolidated volume came to 6.23 billion shares compared with 5.92 billion shares traded Friday....."
A Letter to the Editor
3 years ago