Stocks skidded Monday, with the Dow slumping nearly 778 points, in the biggest single-day point loss ever, after the House rejected the government's $700 billion bank bailout plan.
The day's loss knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market. The Dow Jones industrial average (INDU) lost 777.68, surpassing the 684.81 loss on Sept. 17, 2001 - the first trading day after the September 11 attacks. However the 7% decline does not rank among the top 10 percentage declines.
The Standard & Poor's 500 (SPX) index lost 8.8% and the Nasdaq composite (COMP) fell 9.1%.
Stocks tumbled ahead of the vote and the selling accelerated on fears that Congress would not be able come up with a fix for nearly frozen credit markets. The frozen markets mean banks are hoarding cash, making it difficult for businesses and individuals to get much-needed loans. (Full story)
"The stock market was definitely taken by surprise," said Drew Kanaly, chairman and CEO of Kanaly Trust Company, referring to the House vote. "If you watched the news stream over the weekend, it seemed like it was a done deal. But the money is being held hostage to the political process."
Stocks had fallen from the get-go Monday morning. In addition to expectations for the bailout, there was also news that troubled Wachovia had to sell its banking assets to Citigroup. A number of European banks also collapsed. But the possibility that the House won't pass the bailout plan caused stock losses to accelerate. "It's a huge disappointment," said Jack Ablin, chief investment officer at Harris Private Bank. Although another version of the plan will likely go before Congress, investors are concerned that passing the bill could be a more drawn-out process.
"People do expect that there will be some plan put in place, but even before this vote, there was doubt as to whether it would be enough to avert the crisis," said Ken Kam, portfolio manager of the Marketocracy Masters 100 (MOFQX) fund. Investors thought they would be debating whether the plan was good enough, he said, not whether the plan would even go through. On Monday afternoon Treasury Secretary Henry Henry Paulson said markets around the world are under great stress and that a plan needs to be passed as soon as possible.
And they are worried about how effective the proposed plan would be anyway, said Alan Gayle, senior investment strategist at RidgeWorth Investments. "We are charting new territory in policy tools and implementation with this program and there's no guarantee that it will work," Gayle said. "That a number of institutions haven't been able to last through the negotiations adds to the uncertainty," Gayle said, referring to Washington Mutual's failure on Friday and the buyout of Wachovia Monday. Stocks are also extremely choppy and volatile as Wall Street moves to the end of the third quarter. Financial institutions and funds are expected to have their books settled before Wednesday, so there is a lot of last-minute scrambling, Gayle said. Treasury prices rallied, sending yields lower, as investors sought safety in government debt. Government rescue plan: Congress had supposedly reached a compromise on the $700 billion bank bailout plan Sunday, but the House voted against the bill Monday.
The bill is based around Treasury Secretary Henry Paulson's initial plan to buy up bad mortgage debt from banks as a means of getting them to lend to each other again. However, Congressional lawmakers added provisions to protect taxpayers and enable them to benefit if the companies do as well.
Siga leyendo el artículo de CNN(Full story)
The day's loss knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market. The Dow Jones industrial average (INDU) lost 777.68, surpassing the 684.81 loss on Sept. 17, 2001 - the first trading day after the September 11 attacks. However the 7% decline does not rank among the top 10 percentage declines.
The Standard & Poor's 500 (SPX) index lost 8.8% and the Nasdaq composite (COMP) fell 9.1%.
Stocks tumbled ahead of the vote and the selling accelerated on fears that Congress would not be able come up with a fix for nearly frozen credit markets. The frozen markets mean banks are hoarding cash, making it difficult for businesses and individuals to get much-needed loans. (Full story)
"The stock market was definitely taken by surprise," said Drew Kanaly, chairman and CEO of Kanaly Trust Company, referring to the House vote. "If you watched the news stream over the weekend, it seemed like it was a done deal. But the money is being held hostage to the political process."
Stocks had fallen from the get-go Monday morning. In addition to expectations for the bailout, there was also news that troubled Wachovia had to sell its banking assets to Citigroup. A number of European banks also collapsed. But the possibility that the House won't pass the bailout plan caused stock losses to accelerate. "It's a huge disappointment," said Jack Ablin, chief investment officer at Harris Private Bank. Although another version of the plan will likely go before Congress, investors are concerned that passing the bill could be a more drawn-out process.
"People do expect that there will be some plan put in place, but even before this vote, there was doubt as to whether it would be enough to avert the crisis," said Ken Kam, portfolio manager of the Marketocracy Masters 100 (MOFQX) fund. Investors thought they would be debating whether the plan was good enough, he said, not whether the plan would even go through. On Monday afternoon Treasury Secretary Henry Henry Paulson said markets around the world are under great stress and that a plan needs to be passed as soon as possible.
And they are worried about how effective the proposed plan would be anyway, said Alan Gayle, senior investment strategist at RidgeWorth Investments. "We are charting new territory in policy tools and implementation with this program and there's no guarantee that it will work," Gayle said. "That a number of institutions haven't been able to last through the negotiations adds to the uncertainty," Gayle said, referring to Washington Mutual's failure on Friday and the buyout of Wachovia Monday. Stocks are also extremely choppy and volatile as Wall Street moves to the end of the third quarter. Financial institutions and funds are expected to have their books settled before Wednesday, so there is a lot of last-minute scrambling, Gayle said. Treasury prices rallied, sending yields lower, as investors sought safety in government debt. Government rescue plan: Congress had supposedly reached a compromise on the $700 billion bank bailout plan Sunday, but the House voted against the bill Monday.
The bill is based around Treasury Secretary Henry Paulson's initial plan to buy up bad mortgage debt from banks as a means of getting them to lend to each other again. However, Congressional lawmakers added provisions to protect taxpayers and enable them to benefit if the companies do as well.
Siga leyendo el artículo de CNN(Full story)
Entradas
I usually do nοt drop а bunch of гeѕponsеs, but i diԁ a few
ResponderBorrarѕearching and wound up heгe Sin título. And I аctuаlly ԁo have a couple of questions foг yοu if уou don't mind. Is it just me or does it appear like a few of these responses appear like they are coming from brain dead visitors? :-P And, if you are writing at additional sites, I would like to follow anything new you have to post. Could you list of the complete urls of all your social pages like your linkedin profile, Facebook page or twitter feed?
Look at my webpage Online Payday Loans Direct Lenders
Feel free to surf my blog - Online Payday Loan