Wall Street indexes lowest since 2003
Posted on Thursday, November 20, 2008
U. S. stocks sank and benchmark indexes slid to their lowest levels since 2003 on growing concern Wednesday over the health of the financial system and survival of the nation’s car industry.
The S&P 500 slipped 6. 1 percent to 806. 58, extending its 2008 retreat to 45 percent. The Dow Jones industrial average lost 427. 47 points, or 5. 1 percent, to 7, 997. 28. The Nasdaq Composite Index decreased 6. 5 percent to 1, 386. 42. Twenty-eight stocks fell for each one that rose on the New York Stock Exchange.
Fourteen companies in the Standard & Poor’s 500 Index fell 20 percent or more as government data signaled the recession is deepening. “Hideous day,” said Bill Stone, a chief investment strategist at PNC Wealth Management in Philadelphia. “It’s hard to put a basement on this thing.”
Selling reached a peak in the final minutes of the session as investors yanked money out of the market. For many the real fear is that the recession might stretch even longer if Capitol Hill cannot bail out the troubled auto industry.
Investors also scoured economic data that included minutes from the last meeting of the Federal Reserve in which policymakers lowered projections for economic activity this year and next.
Stocks have traded with high volatility in the past few months as the major indexes have soared only to plunge an hour later as the market looks for a bottom.
“I don’t know what the catalyst is going to be where we turn the corner and people start buying stocks wholeheartedly again,” said Jon Biele, head of capital markets at Cowen & Co. “People got out of the way. The financial situation hasn’t changed.”
Citigroup Inc. slid 23 percent to $ 6. 40, a 13-year low, on a plan to buy $ 17. 4 billion of troubled investment-fund assets. General Motors Corp. tumbled 9. 7 percent to its lowest price since the 1940 s; Ford Motor Co. lost 25 percent.
The selling on the New York Stock Exchange was staggering. Only 158 companies that trade there finished the day positive while 2, 943 declined. Volume again was light, a symptom of the market’s recent volatility, 6. 44 billion shares exchanging hands by the close.
Smaller stocks also got clobbered. The Russell 2000 index gave up 35. 13, or 7. 85 percent, to 412. 38.
The retreat in the U. S. followed declines in Europe and Asia as concern mounted the economic slowdown will cut profits at financial firms and commodity producers. Federal Reserve policymakers last month predicted that the U. S. economy will contract through the middle of 2009, with some prepared to cut interest rates further in response, according to a record of their meeting released Wednesday.
Shares of several retailers dropped sharply, as investors were already feeling nervous about grim economic data and whether automakers General Motors Corp., Ford Motor Co. and Chrysler LLC would get a federal bailout.
Traffic at retailers is expected to decline 9. 9 percent during the Christmas season this year as consumers limit spending, according to a report from research firm ShopperTrak RCT Corp. The company tracks sales and consumers’ visits to stores at more than 50, 000 places in the U. S.
Retailers will be “scrambling” to entice consumers in their stores, said Bill Martin, co-founder of ShopperTrak RCT. He said the company is anticipating the lowest U. S. traffic figures since the survey began in 2001.
Women’s apparel retailer Liz Claiborne Inc. ’s stock sank $ 1, or 32 percent, to $ 2. 13, after hitting $ 2. 07 earlier in the session — a level not seen since 1984. Last week Liz Claiborne narrowed its full-year profit outlook because of “significant declines in consumer confidence and discretionary spending.”
Shares of Jones Apparel Group Inc. slid $ 1. 29, or 21 percent, to $ 4. 83, after hitting $ 4. 80 — a level not seen since 1991.
Elsewhere in the retail sector, shares of department store operator Nordstrom Inc. set a new six-year low of $ 8. 69. The stock declined $ 1. 40, or 13. 5 percent, to finish at $ 8. 98. Department store operators have been hit hard as many Americans trade down to cheaper items. Information for this article was contributed by Eric Martin, Elizabeth Stanton and Elizabeth Campbell of Bloomberg News and Joe Bel Bruno, Sara Lepro and Besty Vereckey of The Associated Press.
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