Dow industrials fall below 7,000; lowest since '97

[Jasman0717 9]

Mar 2, 11:39 AM (ET)

By TIM PARADIS

NEW YORK (AP) - The Dow Jones industrial average plunged below 7,000 Monday for the first time in more than 11 years as investors grow even more pessimistic about the health of banks, and in turn the economy.

A staggering $61.7 billion in quarterly losses at insurer American International Group Inc. (AIG) touched off fresh fears about the health of the nation's financial system.

The worries pushed the blue chips below 7,000 for the first time since Oct. 28, 1997. The credit crisis and recession have now slashed half the average's value since it hit a record high over 14,000 in October 2007.

Investors are fleeing financials after the government said it would give AIG another $30 billion in loans, besides the $150 billion it has already given the company. Investors are worried about European financial companies, too. HSBC PLC, Europe's largest bank by market value, reported a 70 percent drop in 2008 profit and said it needs to raise $17.7 billion and cut 6,100 jobs.

"As bad as things are, they can still get worse, and get a lot worse," said Bill Strazzullo, chief market strategist for Bell Curve Trading. Strazzullo said he believes there's a significant chance the S&P 500 and the Dow will fall back to their 1995 levels of 500 and 5,000, respectively.

The "game-changer," he said, will be the housing market and whether it can stabilize.

In late morning trading, the Dow fell 184.94, or 2.6 percent, to 6,877.99. The Dow last closed below the 7,000 level on May 1, 1997.

Broader stock indicators also slid. The Standard & Poor's 500 index fell 21.16, or 2.9 percent, to 713.93, and the Nasdaq composite index fell 31.42, or 2.3 percent, to 1,346.42.

The Russell 2000 index of smaller companies fell 13.24, or 3.4 percent, to 375.78.

Nine stocks fell for every one that rose on the New York Stock Exchange, where volume came to 526.6 million shares.

Mixed economic readings on Monday weren't enough to prop up stocks.

Personal spending rose 0.6 percent in January and incomes rose 0.4 percent, while construction spending fell 3.3 percent, more than twice as much as economists expected. Manufacturing contracted in February for the 13th straight month, but at a slower pace than expected.

Meanwhile, billionaire investor Warren Buffett wrote in his annual letter to investors Saturday he is sure "the economy will be in shambles throughout 2009 - and, for that matter, probably well beyond - but that conclusion does not tell us whether the stock market will rise or fall."

Bond prices rose as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.94 percent from 3.02 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.24 percent from 0.25 percent Friday.

The dollar was mostly higher against other major currencies, while gold prices fell.

Light, sweet crude fell $3.54 to $41.22 a barrel on the New York Mercantile Exchange.

AIG rose 7 cents, or 16.7 percent, to 49 cents after the government's latest move. HSBC Holdings fell $6.85, or 19.7 percent, to $27.95.

Other financials also fell sharply. JPMorgan Chase & Co. (JPM) fell $1.22, or 5.3 percent, to $21.63, while Bank of America Corp. (BAC) fell 56 cents, or 14.3 percent, to $3.39. Wells Fargo & Co. (WFC) fell $1.35, or 11.2 percent, to $10.75.

In afternoon trading, Britain's FTSE 100 fell 4.5 percent, Germany's DAX index fell 3.2 percent, and France's CAC-40 fell 3.7 percent. Earlier, Japan's Nikkei stock average dropped 3.8 percent and Hong Kong's Hang Seng index fell 3.9 percent.

Edited March 2, 2009 by jasman0717

[Ban Hammer 13,343]

but it's still not obama's fault!

[Yoink 7]

prediction is 5000 before it gets better

[Mr. Big Dog 10,747]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

[I AM NOT THAT GUY 5,715]

The worries pushed the blue chips below 7,000 for the first time since Oct. 28, 1997. (Clinton) The credit crisis and recession have now slashed half the average's value since it hit a record high over 14,000 in October 2007. (Bush)

Don't mean anything, but I thought I should note that. I guess we are back to the Clinton years, that everyone on the left pines for.

Edited March 2, 2009 by Mister_Bill

[Ban Hammer 13,343]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

[I AM NOT THAT GUY 5,715]

prediction is 5000 before it gets better

That would be optimistic. This morning they were talking about 3,500 for the DJIA. Kiss your 401K's and IRA's good-bye!

Edited March 2, 2009 by Mister_Bill

[Mr. Big Dog 10,747]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

Yes, and a huge train rushing downhill can be stopped and reveresed to go up that hill in a split second.

[Ban Hammer 13,343]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

Yes, and a huge train rushing downhill can be stopped and reveresed to go up that hill in a split second.

[Kevin and 10]

prediction is 5000 before it gets better

That would be optimistic. This morning they were talking about 3,500 for the DJIA. Kiss your 401K's and IRA's good-bye!

Time to close accounts. Might as well buy now before the dollar is only good for wiping and fires.

[I AM NOT THAT GUY 5,715]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

Yes, and a huge train rushing downhill can be stopped and reveresed to go up that hill in a split second.

Obama wants to 'hit ground running' on economy

WASHINGTON – With the economy in disarray and the nation's treasury draining, President-elect Barack Obama and his advisers are trying to figure out which of his expansive campaign promises to push in the opening months of his tenure and which to put on a slower track.

Obama repeated on Saturday that his first priority would be an economic recovery program to get the nation's business system back on track and people back to work. But advisers said the question was whether they could tackle health care, climate change and energy independence at once or needed to stagger these initiatives over time.

The debate between a big-bang strategy of pressing aggressively on multiple fronts versus a more pragmatic, step-by-step approach has flavored the discussion among Obama's transition advisers for months, even before his election. The tension between these strategies has been a recurring theme in the memorandums prepared for him on various issues, advisers said.

"Every president is tempted to take on too much," said one Obama adviser, who spoke on condition of anonymity to discuss internal deliberations. "On the other hand, there's the Roosevelt example and the LBJ example, which suggest an extraordinary president can do an awful lot. So that's the question: Is it too risky for the president to be ambitious?"

Much of the issue may be out of Obama's hands. The $700 billion financial bailout threatens to push the deficit into the stratosphere. "The poor man has his hands tied by the economic and financial mess we have right now," said John Tuck, a former aide to President Ronald Reagan. "I don't know what his options are. They're very, very limited."

At a news conference Friday and again in a radio address on Saturday, Obama signaled that he intends to move quickly to address the nation's financial problems, despite any obstacles. "I want to ensure that we hit the ground running on Jan. 20 because we don't have a moment to lose," he said Saturday.

The argument for an aggressive approach in the mold of Franklin D. Roosevelt or Lyndon B. Johnson is that health care, energy and education are all part of systemic economic problems and should be addressed comprehensively. But Democrats are discussing a hybrid strategy that would push for a bold economic program and also encompass other elements of Obama's campaign platform, even if larger goals are put off.

Congressional leaders want to move swiftly in January to pass a major expansion of the Children's Health Insurance Program – a plan vetoed by President Bush – as a step toward the broader coverage Obama promised. Likewise, Democrats plan to incorporate his proposed middle-class tax cuts in the economic legislation or pass them in tandem. And Obama could increase investment in alternative energy as a down payment on a far-reaching climate plan.

"I believe it would be important to show fairly early on that change is here," said Rep. Chris Van Hollen of Maryland, a member of the House Democratic leadership. "One of the very visible ways to show that would be to pass some of the bills George Bush vetoed."

Obama has acknowledged that the economy will force him to recalibrate his program but insists that he has not backed off his commitments. "We can't afford to wait on moving forward on the key priorities that I identified during the campaign, including clean energy, health care, education and tax relief for middle class families," he said Saturday.

During the campaign, Obama identified many other priorities – withdrawing from Iraq and talks with Iran, tackling immigration and the issue of detainees at Guantenamo and trade negotiations with the country's North American neighbors.

At the same time, his team is tamping down expectations of instant action by discouraging talk of a 100-day program.

Obama's transition advisers studied how Kennedy, Roosevelt, Johnson, Reagan and Bill Clinton used their first months. The lesson many drew was that even if various agencies moved forward in many directions, a new president must husband his time, energy and political capital for three dominant priorities at most. Several Obama advisers cited Reagan, who concentrated his early efforts on pushing through major tax cuts and increased military spending.

But advisers also worry that putting off sweeping initiatives makes them harder to pass later, when a president's mandate and momentum have faded. Again, they pointed to Clinton, who delayed his ultimately doomed health care plan while he passed a deficit reduction package and the North American Free Trade Agreement.

The pent-up demand from Democrats who waited out the Bush administration will be enormous. "In the next three months before they take over, the list of demands on the table is going to be staggering, absolutely staggering," said former Rep. Jim Leach of Iowa, a Republican who endorsed Obama during the campaign.

Obama recognizes that. In an interview on CNN days before the election, he explicitly ranked his priorities, starting with an economic recovery package that would include middle-class tax relief. His second priority, he said, would be energy; third, health care; fourth, tax restructuring; and fifth, education.

But then he hedged, foreseeing the unforeseen. "We don't know yet what's going to happen in January," he said. "And none of this can be accomplished if we continue to see a potential meltdown in the banking system or the financial system."

03:20 PM CST on Saturday, November 8, 2008

http://www.dallasnews.com/sharedcontent/dw...my.22f8d68.html

[Peikko 1,575]

When it comes to Obama, it seems the opposition have lost the ability to think in a rational manner. Whatever the problem is, blame Obama after all, he promised change, so if whatever it is hasn't changed and changed for the better than Obama is to blame.

Mind you, I do blame Obama for having such a ridiculous platform slogan. For many reasons I think it was ####### then and it is even more ####### now.

Now, as for the Dow, I am not sure how we can expect that to start a decent upward trend until the banks start lending money to business and they are not going to do that when they are basically technically insolvent so I can't see bulls in the headlights for now.

[Mr. Big Dog 10,747]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

Yes, and a huge train rushing downhill can be stopped and reveresed to go up that hill in a split second.

Obama wants to 'hit ground running' on economy

Yes, and? Anyone who expected the economy (which contracted a record 6%+ during Bush's last quarter in office) to start growing again in Obama's first quarter in office lives in some bubble. Not once has Obama claimed that he would be able to turn the economy around in weeks. He's said consistently that it'll take time, effort and sacrifice to turn pull the economy out of the mud.

Have you been equally critical of Bush not delivering on his "6 months tops" Iraq strategery?

[Heracles 417]

but it's still not obama's fault!

Of course it is seeing that he inherited a perfectly sound and strong economy with a vibrant housing and credit market and yet, he managed to totally ** it all up in less than 6 weeks. He destroyed all of the economic gains of the Bush presidency in a few short weeks.

Oh wait, there weren't any economic gains during the Bush presidency. Only staggering losses.

i thought we had change coming?

It's here.

Now everyone is as equally poor.

[Heracles 417]

I wonder if A.J's cousin is still moving to NYC from Sydney. One of my friends from there was saying that lawyers are applying for jobs at his local bar.

What a dumb move..