Stocks Saved the Worst for the Last, Closing at 5-Year Low
It looks like there’s just nothing can stop the stock market sell-off, not even the hint of a rate cut from the Fed (Bloomberg), which usually got investors excited in the past.
Stock indexes went up briefly at the opening on the news that the Fed Reserve announced that it will buy back short-term commercial papers from issuers. The move was aimed to let people start to lend, so people can borrow, again. However, the initial excitement quickly faded away as traders shifted their focus to the worsening global crisis. At the end of the day, all three major indexes posted deep losses. The Dow Jones fell 508.39 points, or 5.11%, to 9,447.11, the lowest level in more than 5 years. The benchmark has lost more than 1,400 points, or nearly 13% of its value in the past five trading sessions. Year-to-date, the Dow has dropped about 29%, the worst performance in 71 years (Bloomberg). Today’s 508.39-point loss also ranks the 6th on the top 10 largest drops list. Now 4 out the 10 biggest losses happened in less than one month The S&P 500 sank 60.66 points, or 5.74%, to 996.23, which is also a 5-year low, and The drop was the S&P 500′s biggest five-day percentage decline since the 1987 crash, and the NASDAQ tumbled 108.08 points, or 5.80%, to 1,754.88.
Of those stocks I own, Bank of America (BAC) plunged 26.34% after the bank, which recently acquired Countrywide Financial and Merrill Lynch, said the profit in latest quarter fell 68% and it will cut dividend by half to 32 cents per share (dividend distribution of BoA was the reason I bought the shares in the first place) to reserve capital and cover losses from the purchases. In addition, the bank also announced it will issue $10 billion common stocks.
There doesn’t seem to be an end in sight.
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