Major stock market indexes fall to 1997 levels

NEW YORK -- Major market indexes staggered to their lowest levels in a decade Monday, pulled lower by investors' rapidly waning confidence.

The Dow Jones industrial average tumbled 251 points to its lowest close since Oct. 28, 1997, while the Standard & Poor's 500 index logged its lowest finish since April 11, 1997.

All the major indexes slid more than 3%. The Dow is just over 100 points from 7,000.

"People left and right are throwing in the towel," said Keith Springer, president of Capital Financial Advisory Services.

Most financial stocks were pounded even as government agencies led by the Treasury Department said they will launch a revamped bank rescue program that includes the option of increasing government ownership in financial institutions without pouriing more taxpayer money into them.

Although the government has said it doesn't want to nationalize banks, many investors are clearly still concerned that this could be possible as banks continue to suffer severe losses. They're also worried that banks' losses will escalate as the recession sends more borrowers into default.

"The biggest thing I see here is the incredible pessimism," Springer said. "The government is doing a lousy job of alleviating fears."

"It's only a very partial picture of what we may get," said Quincy Krosby, chief investment strategist at The Hartford. "This proverbial lack of clarity is damaging market psychology."

"There's nowhere to hide anymore," said Jim Herrick, director of equity trading at Baird & Co.

The market's decline extends massive losses from last week, when the major stock indexes tumbled more than 6%. The indexes plunged through the lows they reached in late November, at the height of the credit crisis.