Stocks plunge as Dow drops below 10,000 on global fears
NEW YORK -- Stocks suffered through another traumatic session Monday, with the Dow Jones industrials falling 370 points — after having plunged almost 800 points earlier and setting a new record for a one-day point drop — pushing it below 10,000 for the first time since October 2004, as investors sold 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.
The credit markets remain stagnant, a sign that banks are too afraid to lend. The Federal Reserve is making more money available for borrowing, but no one expects the credit markets to ease up anytime soon.
The Dow fell as much as 800.06, then recovered in erratic trading to a loss of 369.88, or 3.58%, to close at 9,955.50. The Dow surpassed its previous record for a one-day point decline — 778, which the blue chips suffered a week ago when investors feared the bailout package might not pass Congress.
Broader indexes also tumbled. The Standard & Poor's 500 index shed 42.34, or 3.85%, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34%, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79%, to 595.91.
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 point 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%.
