Dow Plunges to 11-Year Low
Tuesday, March 3, 2009 9:19
As investors are unable to extinguish their worries about a recession that has no end in sight, they’ve “thrown in towel”.
As a result, Wall Street turned the clock back to 1997 yesterday as shares dumped again. The Dow Jones industrial avrage tumbled 251 points to the lowest close ever since October 28th 1997, while the Standard & Poor’s 500 index logged the lowest finish ever since April 11th 1997.
All the big indices slid by more than 3%. The Dow is just over 100 points from the 7000 watershed.
Investors pounded most financial stocks even as government agencies led by the Treasure Department said that they would launch a revamped bank rescue program this week. The plan includes the option of increasing governemnt to ownership in financial institutions without having to pour more taxpayer money into them.
Though Washington has said that it does not want to nationalise banks, many investors are still concerned that this could be a possibility as banks continue to suffer severe losses due to the recession. They are also worried that banks’ losses will keep escalating as the recession sendes more borrowers into default.
The Treasury and other agencies issued a statement after The Wall Street Journal reported that Citigroup was in talks for the Government to boost its stake in the bank to as much as 40%. Analysts said that the market, which initially rose after the statement, wanted more details of the Government’s plans.
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