4 Min Read
NEW YORK (Reuters) - Stocks plunged yet again on Thursday, as a frantic flight from risk prompted by investors' deepening economic fears drove the benchmark Standard & Poor's 500 index to its lowest level since 1997 -- completing the erasure of more than a decade of stock market gains.
The latest leg down in what has been a 13-month whipping of equities worldwide was led by the year's weakest links: banks, commodity producers and car makers.
The S&P 500 is now more than 52 percent below its October 2007 record high, making the current bear market the second biggest on record. The current decline is exceeded only by the 83 percent drop between 1930 and 1932, according to the Stock Trader's Almanac.
"People are looking for light at the end of the tunnel and people don't see anything," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.
On Thursday, the price of oil hurtled below $50 a barrel, taking energy shares with it as dismal U.S. economic data intensified concerns of a long and deep global recession, crushing fuel demand expectations. Chevron tumbled more than 8 percent and dragged the most on the Dow.
The Dow Jones industrial average plunged 444.99 points, or 5.56 percent, to 7,552.29. The Standard & Poor's 500 Index lost 54.14 points, or 6.71 percent, to 752.44. The Nasdaq Composite Index slid 70.30 points, or 5.07 percent, to 1,316.12.
But after the closing bell, a bright spot emerged when shares of Dell Inc rose 6.3 percent to $10.43 after the world's No. 2 PC maker reported better-than-expected profit as cost cuts tempered lower revenue.
And in another positive development after hours, Fannie Mae and Freddie Mac, the two biggest home loan finance companies, said they would suspend foreclosures of occupied homes until early 2009 -- one of the biggest moves to date by the government to staunch the wave of evictions and home losses. [ID:nN20621384].
Earlier on Thursday, the number of American workers on the unemployment rolls surged to the highest in a quarter century, government data showed, while a regional manufacturing gauge slumped as the economic misery intensified.
Financial stocks helped lead the way lower. Citigroup dove 26.4 percent to $4.71 on growing worries about whether the second-largest U.S. bank has enough capital to withstand billions of dollars of additional loan losses, overshadowing fresh support from Saudi Prince Alwaleed, its largest individual investor.
An S&P index of financial shares tumbled 10.5 percent. JPMorgan Chase & Co was the second-heaviest weight on the Dow, falling 17.9 percent to $23.38.
Further uncertainty over the prospects for a bailout for struggling automakers added to the gloom. Democratic leaders warned the bill would not pass unless it included a plan for the industry to return to profitability.
Shares of General Motors and Ford were tied to the bailout news, ending higher after falling sharply earlier in the day. GM rose 3.2 percent to $2.88, while Ford advanced 10.3 percent to $1.39.
Democratic leaders said automakers can submit another plan by December 2, adding that the proposal could be considered the week of December 8.
In the energy sector, Chevron dropped 8.8 percent to $64.40, while an S&P index of energy companies tumbled 11.2 percent.
U.S. front-month crude oil fell $4.00 to settle at $49.62 a barrel, the lowest settlement since May 23, 2005.
Volume was heavy on the New York Stock Exchange, where about 2.23 billion shares changed hands, above last year's estimated daily average of 1.90 billion, while on the Nasdaq, about 3.15 billion shares traded, well above last year's daily average of 2.17 billion.
Decliners outnumbered advancers on the NYSE by a ratio of 13 to 1, while on the Nasdaq, nearly seven stocks fell for every one that rose.