Tulsa World: UPDATED: Post-election Dow falls 486 points

MAKE US YOUR HOMEPAGE | Friday, November 20, 2009 | WIRELESS

Home > News > Article

Comment

RSS

Bookmark

UPDATED: Post-election Dow falls 486 points

A trader looks at screens as he works on the floor of the New York Stock Exchange on Wednesday, when the Dow Jones industrials fell nearly 500 points. AP

By The Associated Press
Published: 11/5/2008 7:06 AM
Last Modified: 11/5/2008 4:14 PM

A case of post-election nerves sent Wall Street plunging Wednesday as investors absorbing a stream of bad economic news wondered how a Barack Obama presidency will help the country weather a possibly severe recession. Volatility returned to the market, with the Dow Jones industrials falling nearly 500 points and all the major indexes tumbling more than 5 percent.

The market was expected to give back some gains after a six-day runup that lifted the Standard & Poor’s 500 index more than 18 percent. But investors lost some of their recent confidence about the economy and began dumping stocks again; light volume helped exaggerate the price swings.

“I think what is happening in the market is a continuation of really the last few weeks,” said Subodh Kumar, global investment strategist at Subodh Kumar & Associates in Toronto. “The markets are still incorporating the slowdown in the global economy.”

Worries about the financial sector intensified after Goldman Sachs Group Inc. began to notify about 3,200 employees globally that they have been lost their jobs as part of a broader plan to slash 10 percent of the investment bank’s work force, a person familiar with the situation said. The cuts were first reported last month. Goldman fell 8 percent, while other financial names like Citigroup Inc. fell 14 percent.

Commodities stocks also fell after steelmaker ArcelorMittal said it would slash production because of weakening demand. Its stock plunged 21.5 percent.

Although the market expected Obama to win the election, as the

session wore on investors were clearly worrying about the weakness of the economy and pondered what the Obama administration might do to help it. Analysts said the market is already anxious about who Obama selects as the next Treasury Secretary, as well as who he picks for other Cabinet positions.

Analysts said investors were also uneasy in advance of the Labor Department’s October employment report, to be issued on Friday. Economists on average expect a 200,000 drop in payrolls, according to Thomson/IFR. Employers have been slashing jobs after a freeze-up in the credit markets crippled many companies’ ability to get financing.

Late-day selling by hedge funds helped deepen the market’s losses during the last hour. More selling by the funds is expected to weigh on the market ahead of a Nov. 15 cutoff for shareholders to notify fund managers of their intent to cash out investments before year-end.

According to preliminary calculations, the Dow fell 486.01, or 5.05 percent, to 9,139.27.

The S&P 500 index fell 52.98, or 5.27 percent, to 952.77. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.

The Nasdaq composite index fell 98.48, or 5.53 percent, to 1,681.64, while the Russell 2000 index of smaller companies fell 31.33, or 5.74 percent, to 514.64.

By The Associated Press

Comment

RSS

Bookmark

Reader Comments

Show: Most Recent Comment First

Add your comment

9 comments have been made on this story so far. Tell us what you think below!

Reporting Comments

If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you. -- Web Editor Jason Collington

	Report Comment Bluebird of DOOM, Osage County (11/5/2008 7:54:46 AM) I'm sure President-elect Obama is very intelligent and capable, politics aside, but unless he is Merlin the Magician or the Great Houdini, I can't see how he can get us out of this mess we're in. Honestly, I hope he pulls it off and gets the economy on the right track, for various personal reasons and for the good of our country, but sheer hope won't bring back jobs, keep housing prices from falling, get the average person to spend more when they have no more cash or credit, or erase the average person's debt. Good old-fashioned fundamentals such as rebuilding our infrastructure and saving and spending wisely would work, but that will be a painful process and will require sacrifices we don't seem to want to make. The only other solution I see is to go much, much deeper into debt to buy temporary prosperity on the backs of our future generations, which to me would be a shameful crime. Already DONE! 810B BAIL OUT BILL WHICH HE VOTED ON! Sorry to be so negative even before Obama steps into office, but I've seen too much go wrong to have confidence that government or the powers that be will do the right thing. Come on, Obama, surprise the heck out of me!
	Report Comment chase, (11/5/2008 10:56:26 AM) I have grave concerns for the auto industry,gm and chysler may merge,but ford will probably go bankrupt,ford bonds are at junk status,the 25 billion may help some,but I dont know
	Report Comment LocalBoy, B.A. (11/5/2008 12:15:15 PM) I said it before. This outcome will be bad for business. And much as young liberals like to bash business, "business" is who pays the bills. When will the hotheads learn that what is bad for business is bad for people? I don't want to see busineses failing or moving out of US or people losing jobs as a result. I am gravely afraid that is where we are headed, though as smooth talk and promises of change won't work for the next phase - the next phase will require actually committing to some things and making something happen. I just hope I'm wrong about what will happen.
	Report Comment Bluebird of DOOM, Osage County (11/5/2008 12:16:13 PM) Obama has promise them $50Billion, Chase. We shall see if he comes through!!! This will be his FIRST test. They need the $$$ NOW. Problem...where will he cough UP the other 25Billion??? It's NOT in the KITTY! I'm just curious who the next Tresury Secretary will be??? Hank is outta there in January. Ben is a Yes man.
	Report Comment concernedpapa, Kiefer (11/5/2008 1:03:15 PM) Bluebird your concerns are well founded. the finacial crisis is a must fix, with no easy solutions. He did vote for the sell out and i didnt like it either. He has surrounded himself with some intellegent financial people so hopefully he can make it work. And work is exactly what will be demanded by everyone, if we are to survive.
	Report Comment commonsense, Tulsa (11/5/2008 1:12:05 PM) Granted we are facing hard times now , and Bush won't make it any easier for him , like Clinton did when Bush took office. However, when we change presidency Wall Street stocks alway go in this directions reguardless of who is going into office.
	Report Comment Legal Citizen, (11/5/2008 4:19:39 PM) "UPDATED: Post-election Dow falls 486 points" >> Change we can believe in....
	Report Comment HitAnyKey, Tulsa (11/5/2008 4:26:49 PM) I told you so!
	Report Comment Pastor Reginald Levi Walker, Tulsa (11/5/2008 4:45:58 PM) UPDATED: Dow index suffers record point drop - 10/6/2008 9:26:12 PM The truth no one wants to say or hear; we are in the very beginning of an economic famine ----- If you are still investing in the hope that the stock market will correct itself after this morning revelation of the spread of the economic crisis to the global stage, by the end of the election day you will state that that was the most unwise decision you ever made. Please remember for years upon decades, America's debt and needs were sold to these over seas economies that are currently faltering. Therefore, because of this, some of these economies have been supported by the U.S. economy. If the foundation of the house (America's economy) is washed away in a storm what will happen to the rest of the house (the global economy). It can try to stand-alone, however, without a foundation it will soon fall and come crashing down. Anderson, this is what has happened. As always, may God bless each of us, Pastor Reginald Levi Walker

Add Your Comment
In order to post a comment on this article, you must sign in to Tulsaworld.com. If you do not have a site account, you can create an account for free.