Dow drops below 10,000 as world stocks plunge
NEW YORK -- The Dow Jones industrial average plunged more than 500 points in trading on Monday, pushing it below 10,000 for the first time since October 2004, as investors bailed out of stocks on fears that the credit crisis is spreading economic havoc around the globe.
Traders on Wall Street said the government's $700 billion economic rescue plan signed into law Friday might not be enough to calm the short-term economic storm. And that more capital must be injected into the global banking system.
About 12:30 a.m. ET, the Dow was off 493 points, or 4.78%, to 9,832. It was the blue-chip average's first trade below the 10,000 milestone since Oct. 26, 2004. At one point, the Dow was down nearly 600.
The sell-off followed similar stock routs in Asia overnight and in Europe today.
• Stocks in Tokyo closed down 4.3%.
• Germany's DAX lost 7.07%
• Britain's FTSE 100 ended 391.1 points lower at 4,589.2, down 7.8%. It was the biggest ever one-day points fall and the third biggest percentage decline. "Black Mondays used to be a once-a-decade event, now they're coming along more regularly than a London bus," said Manoj Ladwa, senior trader at ETX Capital.
• France's CAC-40 share index closed at 3,711.98 points, a loss of 368.77 points, or 9.04%, its worst percentage drop ever. The previous worst drop in percentage terms for the CAC-40 was on Sept. 11, 2001, when it closed down 7.39%.
Todd Leone, a trader at Cowen & Co., says investors are dumping stocks across the board, with the financial pain being felt in stocks of all sizes and in all sectors of the economy.
"There's nothing green on my screen," says Leone. "They are selling everything. We sliced right through Dow 10,000."
As is often the case in market panics, "herd mentality" appears to be taking over, as selling begets selling, Leone adds.
Falling shares topped rising shares by a 30-to-1 ratio on the New York Stock Exchange. And only one stock hit new highs, vs. more than 1,100 new lows.
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