Dow Jones Dropped to New 6-Year Low – Chart of the Day
Major stock indices dropped to new multi-year lows on Wednesday as financial, again, and tech stocks weighed on the market. At the close, Dow Jones Industrial Average lost 89.68 points to 7,465.95, breaking the November 20, 2008 low. The last time the Dow closed lower was on October 10, 2002 when the blue-chip benchmark was at 7,286.27, the bottom of the last recession after the dot-com burst. So far in 2009 the Dow has lost 1,310.44 points or 15%. Since reaching the all-time high of 14,164.53 on October 9, 2007, the Dow has surrendered 6,698.57 points, or 47.3%.
Despite the passage of the massive economic stimulus package and promises from the government to help millions of homeowners fight foreclosures, investors didn’t gain much confidence from the government’s plan to revive the economy and the housing market. The fact that the Dow dropped below its November low singles that the slump could continue. At the same time, the Labor Department reported today that nearly 5 million Americans now collect unemployment benefits.
Recovery? It won’t come any time soon.
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We are likely a distance from the Dow bottom yet. So long as there is real instability and a lack of confidence that the people in power have a clue about what they are doing this downward trend is going to continue.
But, remember, it is just the Dow. If you take a look at Canadian junior miners and exploration companies you’ll see they cratered months ago and are fighting their way back up. Plus you get the CDN/USD play which is a classic bet on stability versus mayhem.
It’s also worth it to see when the Dow first hit 7400, which was May 1997. The value of the Dow is the same as it was 12 years ago.
@Kevinf: The S&P hit that mark last November which, as you said, is a 12 year low.