• IP addresses are NOT logged in this forum so there's no point asking. Please note that this forum is full of homophobes, racists, lunatics, schizophrenics & absolute nut jobs with a smattering of geniuses, Chinese chauvinists, Moderate Muslims and last but not least a couple of "know-it-alls" constantly sprouting their dubious wisdom. If you believe that content generated by unsavory characters might cause you offense PLEASE LEAVE NOW! Sammyboy Admin and Staff are not responsible for your hurt feelings should you choose to read any of the content here.

    The OTHER forum is HERE so please stop asking.

Wall Street slips to five-year low as global markets stay tense

CENWEN

Alfrescian
Loyal
<cite class="auth">AFP - Wednesday, October 8</cite>

NEW YORK (AFP) - - Stocks plunged for a second day running on Wall Street on Tuesday, while those in Europe were mixed, on persistent anxiety over the health of the banking sector -- and despite central bank initiatives to shore up confidence.

<!--Vendor: Yahoo, Format: Standard --><script language="javascript"> if(window.yzq_d==null)window.yzq_d=new Object(); window.yzq_d['0bLZCXxsfDI-']='&U=13fo1kh34%2fN%3d0bLZCXxsfDI-%2fC%3d697781.13001790.13218395.2013436%2fD%3dLREC%2fB%3d5499784%2fV%3d1'; </script><noscript>
b
</noscript>Wall Street opened with solid gains, bolstering both spirits and prices in Europe after the US Federal Reserve, the European Central Bank and EU finance ministers all announced new measures to stanch a credit crisis and protect savers' deposits. But the rebound was short-lived, with the Dow Jones Industrial Average shedding 508.39 points, or 5.11 percent, to close at a five-year low of 9,447.11 -- worse than its 369-point slide Monday.
The tech-heavy Nasdaq plummetted 108.08 points (5.80 percent) to 1,754.88 and the Standard and Poor's 500 index slid 60.66 points (5.74 percent) to 996.23, dropping below a key level of 1,000 points and also hitting a five-year low.

Bank of America, the biggest US bank in market capitalization terms, slid 26 percent to 23.77 dollars after it unveiled plans to slash its dividend and raise 10 billion dollars by selling new shares, diluting the value for existing stock holders. Citigroup fell 12.9 percent to 15.15 dollars and Wells Fargo skidded 9.04 percent to 30.60 after they declared a cooling-off period in their legal tussle over Wachovia, down 9.17 percent at 5.25 dollars.
Analysts at the Charles Schwab brokerage house said the market was slammed by "continuing fears about the credit crisis and worries about the health of the economy, exacerbated by Fed chairman Ben Bernanke's comments in a speech today."

Bernanke signalled the Federal Reserve would cut interest rates in response to a worsening outlook for US economic growth. European stock markets were mixed Tuesday, with Paris and London perking up and Frankfurt slipping back, a day after they sustained huge losses over the vulnerability of Europe's banking industry. London's FTSE 100 index rose 0.35 percent to close at 4,605.22 while in Paris the CAC 40 gained 0.55 percent at 3,732.22 . In Frankfurt, the DAX fell 1.12 percent to 5,326.63. the most dramatic move Tuesday came from the Federal Reserve, which opened up its coffers to companies hit by the credit crunch with a new program that will buy up commercial paper -- the short-term debt critical for many corporate operations. "This bold but necessary move will put the Fed in the position of essentially lending directly to businesses, rather than to the financial institutions under its regulatory umbrella," said Ryan Sweet at Economy.com.

This latest effort to overcome the credit crunch creates a new "liquidity backstop" for corporate finance, the Federal Reserve said. It was established after the US Treasury determined it was "necessary to prevent substantial disruptions to the financial markets and the economy". Frederic Rozier of the Meeschaert financial firm said: "The problem for the stock exchanges is extreme tension on credit markets," where banks carrying heavy debt remain reluctant to lend, leaving businesses strapped for cash. The European Central Bank meanwhile laid out a schedule for fresh coordinated action to be taken in tandem with other central banks to expand the provision of US dollars to commercial banks. At the same time, the 27-nation European Union more than doubled bank deposit guarantees to at least 50,000 euros (68,000 dollars) per account, in the bloc's first joint action against the global financial maelstrom. Desperate to restore confidence in the banking system, European finance ministers also vowed to ride to the rescue of big banks whose collapse would threaten broader financial stability. "We have agreed to assure the solidity and stability of our financial system and carry out any measure to reach that objective," said French Finance Minister Christine Lagarde, whose nation holds the EU's rotating presidency.

In major developing economies, stock prices in Russia stabilized on Tuesday before closing down 0.95 percent at to 858.16 points on the dollar-denominated RTS market. Brazil's stock market, the biggest in Latin America, closed 4.66 percent lower at 40,139, near to its two-year low.
In the Middle East, stock markets plunged across the Arab world, with billions of dollars wiped off the value of shares. In Israeli, however, stocks perked up after the Bank of Israel cut interest rates.
 
Top