Stocks tumble as bailout plan fails in House By TIM PARADIS, AP Business Writer
6 minutes ago
NEW YORK - Wall Street plunged precipitously Monday, at one point sending the Dow Jones industrials down more than 735 points as investors feared that the failure of the government's financial rescue plan in the House will force the country into a worsening credit and economic credit risis.
As the vote was shown on TV, stocks plunged and investors fled to the safety of the credit markets, worrying that the financial system would now keep sinking under the weight of failed mortgage debt.
"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."
While investors had some worries that the vote would be close, many on Wall Street appeared to believe it would ultimately pass. The proposal wasn't been seen on the Street as a panacea for the deepening problems in the financial sector that have led to the failure of Lehman Brothers Holdings Inc. and Washington Mutual Inc. and the forced sale of Merrill Lynch & Co. and Wachovia Corp. — and that still pose a threat to many other banks.
The markets turned highly volatile as it became clear the measure wouldn't find the necessary support. The Dow regained ground then fell back again, trading down 686.49, or 6.16 percent, to 10,456.64. At its low, it was down 735.36, beyond its previous record for an intraday drop, 721.56, set during the first trading day after the Sept. 11, 2001, terror attacks. Still, in percentage terms, the decline remained well below the more than 20 percent drops seen on Black Monday of October 1987 and the Depression.
Broader stock indicators also tumbled. The Standard & Poor's 500 index declined 95.53, or 7.88 percent, to 1,117.74; the decline on the day represented a paper loss of more than $700 billion, S&P said.
The technology-heavy Nasdaq composite index fell 173.06, or 7.93 percent, to 2,010.28.
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1 hour ago
2 comments:
Segundo Robyn Dixon do jornal Los Angeles Times já há implicações do chumbo do plano Bush pelos sistemas financeiros da Africa Austral:
Investors see South Africa as too risky, September 30, 2008
About $2.16 billion has flooded out of the country so far this year as foreign investors sell off stocks and continue to shun emerging markets.
It was a bit like a mouse trying to calm a herd of frightened elephants.
With both the world financial markets and South Africa's political scene in turmoil, the country's new president went on national TV Sunday promising to avoid any sharp changes in economic policy.
The morning after Kgalema Motlanthe's speech, the rand currency slid even further. Investors are shunning emerging markets as just too risky.
A speech by Reserve Bank chief Tito Mboweni on Sept. 18 starkly exposed South Africa's vulnerability to the global economic turmoil. About 18 billion rand ($2.16 billion) has flooded out of the country so far this year as foreigners sold off stocks.
Motlanthe this month replaced President Thabo Mbeki, who was forced out by his African National Congress. Motlanthe is widely seen as a caretaker for ANC leader Jacob Zuma, who is likely to win the post in elections next year.
South Africa, an economic powerhouse in sub-Saharan Africa, exports commodities such as platinum, gold and diamonds. When the subprime crisis hit, South Africa initially weathered the storm well because its banks weren't exposed to the bad mortgage-related debt. But now it is suffering the secondary effects.
"We are seeing less capital being available in emerging markets generally and in particular South Africa," said Jac Laubscher, economist at Sanlam, a financial services group. "The fact we have a current-account deficit in excess of 7% means the financing of that current account becomes more of an issue, and there is a possibility of downward pressure on the rand."
Gold traditionally is a refuge for investors in time of turmoil, and the increase in gold prices is good for South Africa. But even more important to its economy is platinum, and its price has slumped about 50% since March.
"Platinum has overtaken gold as our most important export, and the platinum price has halved," Laubscher said, adding that increases in the gold price were unlikely to compensate.
South African gold trader Charles Leishman of Standard Bank said gold was being traded emotionally; platinum's price was falling because of weak industrial demand.
"They're actually very distinct, given the environment we're in the moment. [Platinum] is very demand driven. Gold at the moment is very emotionally driven.
"Nobody knows how long it [the global credit crisis] is going to go on for. You can inject all these billions of dollars but is that going to take the toxic sludge out of the system?"
Hoje o dolar esta robusto...
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