http://www.foxbusiness.com/story/markets/futures-slip-chinese-dash-stimulus-hopes-gm-warning/A perfect storm of bad news ripped through Wall Street on Thursday, sending the Dow diving 281 points, the Nasdaq Composite to six-year lows and shares of Citigroup below the $1 mark for the first time ever.
The markets never stood much of a chance on Thursday as concerns about the health of the nation's banks, the future of General Motors and China's ability to lead the world out of the global recession slammed stocks once again.
Today's Markets
The Dow Jones Industrial Average fell 281.40 points, or 4.09%, to 6594.44, the S&P 500 lost 30.32 points, or 4.25%, to 682.55 and the Nasdaq Composite dropped 54.15 points, or 4.00%, to 1299.59. The consumer-friendly FOX 50 sank 21.13 points, or 3.95%, to 513.47.
“In 35 years on Wall Street I never thought I would see this sort of a day. It’s very disconcerting to investors to see the staples of the financial sector trading below $1,” NYSE trader Doreen Mogavero told FOX Business, referring to Citigroup (C: 1.03, -0.1, -8.85%) and AIG (AIG: 0.3663, -0.0668, -15.42%). “It’s just another bombardment of negative news in the marketplace. We really need something to stop it and I think it’s got to be [positive] housing” news.
Thursday's massive selloff -- the second 200-point plunge of this week alone -- made a 150-point jump on the Dow from Wednesday evaporate almost instantly. The benchmark index is now off by 25% year-to-date amid serious fears about how long the recession will last and what the government will do to stem the tide.
“Financials are getting slammed again. They are down 50% for the year. This is one of those days where nothing goes right,” said Dan Greenhaus, equity analyst at Miller Tabak. “On days like this, there’s just not going to be hope for the market, especially when it’s in a weakened state.”
Led by double-digit plunges from Alcoa (AA: 5.27, -0.97, -15.54%), JPMorgan Chase (JPM: 16.6, -2.739, -14.16%) and General Motors (GM: 1.89, -0.29, -13.3%), the Dow ended at its lowest level since April 1997 on Thursday. Despite the heavy losses, defensive plays Wal-Mart (WMT: 49.8, 1.29, 2.66%) and Pfizer (PFE: 12.6892, 0.2092, 1.68%) ended higher.
Even though the Nasdaq Composite saw lighter selling than the broader markets, the index still tumbled below its November closing low to end at its worst closing level since March 2003. Tech heavyweights like BlackBerry maker Research in Motion (RIMM: 37.98, -2.51, -6.2%) plunged and other stocks like Steel Dynamics (STLD: 8.03, -0.94, -10.48%) also tumbled.
Thursday's selling likely began overseas as China dashed some hopes it will lead the world out of the downturn. Chinese Prime Minister Wen Jiabao surprised Wall Street by declining to address any additional spending on top of the previously-announced $585 billion spending plan, sending basic materials and industrial stocks like Caterpillar (CAT: 23.5076, -1.9624, -7.7%) and U.S. Steel (X: 17.69, -1.2038, -6.37%) tumbling.
Banks, GM Haunt Markets
Financial stocks were the biggest losers on Thursday, diving 9% to fresh lows. The financial jitters were underscored by shares of Citi, which plunged double-digits to all-time lows despite a lack of any corporate news.
Citi breaking $1 per share “indicates to the rest of the world that everyone feels the very existence of Citigroup is being questioned," Matt McCormick, vice president at Bahl & Gaynor Investment Counsel, told FOX Business.
Banks were hit by fierce selling after Moody’s warned late Wednesday it may slash its credit ratings on Wells Fargo (WFC: 8.109, -1.571, -16.23%) and Bank of America (BAC: 3.24, -0.35, -9.75%) and changed its outlook to negative on JPMorgan Chase (JPM: 16.6, -2.739, -14.16%).
The markets were also hurt by General Motors (GM: 1.89, -0.29, -13.3%), which said its auditor has expressed considerable doubts about its ability to continue as a going concern -- accounting speak for saying GM may not survive. While the disclosure was somewhat expected, the specter of liquidation clearly spooked Wall Street.
Markets Shrug Off Labor Data, Wal-Mart
Thursday's headlines weren't exclusively negative as the government said initial jobless claims fell by 31,000 to 639,000 last week, topping expectations but remaining near 26-year highs. All eyes Friday will be on the government's February jobs report, which economists expect will show the U.S. 650,000 jobs as the unemployment rate neared 8%.
There were a few bright spots in February's newly-released retail sales reports, led by a better-than-expected 5.1% jump in same-store sales for retail king Wal-Mart (WMT: 49.8, 1.29, 2.66%), which also upped its annual dividend by 15%. The other results were mixed as Target (TGT: 26.31, -0.82, -3.02%) exceeded expectations but other such as Gap (GPS: 10.2, -0.45, -4.23%) and Macy's (M: 6.58, -0.77, -10.48%) disappointed.
In the commodity markets, oil gave back part of Wednesday's big gains, tumbling $1.77 per barrel to $43.61. Gold jumped $21 per ounce to settle at $927, ending an eight-day slide.
Topic: Dow plunges again!!!! 281 points (4.09%) to 6594 - Every day is Black Monday (Read 972 times)