Dow Jones Plummets
U.S. stocks slid, halting a five-day advance, on growing concern the global economic slump is deepening and consumers’ access to credit is shrinking.
General Electric Co. and Caterpillar Inc. lost more than 6 percent following a report that manufacturing contracted at the fastest pace in 26 years. American Express Co. and JPMorgan Chase & Co. fell more than 9 percent on Oppenheimer & Co. analyst Meredith Whitney’s prediction that credit-card companies will cut available lending by 45 percent, or more than $2 trillion. Treasuries rose, pushing yields to record lows, as Federal Reserve Chairman Ben S. Bernanke said the central bank may buy bonds to combat the worsening recession.
“The economic news is going to continue to get worse before it gets better,” Leo Grohowski, the New York-based chief investment officer for the wealth management unit of Bank of New York Mellon Corp., which oversees $158 billion, told Bloomberg Radio. “The biggest single challenge in terms of the economy is the state of housing and it still remains precarious.”
The S&P 500 sank 6.2 percent to 840.29 at 3:16 p.m. in New York. The Dow Jones Industrial Average fell 464.03 points, or 5.3 percent, to 8,365.01. The Nasdaq Composite Index declined 6.2 percent to 1,440.31. Almost 30 stocks retreated for each that rose on the New York Stock Exchange.
The five consecutive advances in the S&P 500 before today marked the benchmark gauge’s longest streak of gains since July 2007 and sent it up 19 percent from an 11-year low on Nov. 20, the most over five days since 1933.
Recession Since ‘07.
