Stocks dive to close brutal week on belief global recession is likely
NEW YORK -- Wall Street capped another difficult week with steep losses Friday, sending the major indexes to their lowest levels in more than five years as markets around the world skidded lower on the belief that a punishing economic recession is at hand.
It was a dramatic, fractious day on the Street, with the Dow Jones industrials falling more than 500 points soon after trading began and, following the pattern of recent sessions, recovering ground only to fall sharply again. They ended the day with a loss of 312.
The pullback on Wall Street wasn't as steep as some observers had feared after stocks plunged overseas in response to another round of grim corporate news.
The Dow fell 312.30 points, or 3.6%, to close at 8,378.95. Still, the blue chips remained above the 8,000 level; at its recent low of Oct. 10, the Dow traded as low as 7,882.51.
The Standard & Poor's 500 index dropped 31.34, or 3.5%, to 876.77 and the Nasdaq compostie index fell 51.88, or 3.2%, to 1,552.03.
Friday's finish was the lowest for the Dow since April 25, 2003, when it ended at 8,306.35. For the S&P, it was the lowest ending since April 11, 2003 when the index finished at 868.30.
For the week, the Dow fell 5.35%, the S&P 500 lost 6.78% and the Nasdaq fell 9.31%.
Diving stock prices are being driven by emotion and fear in a bear market that just seems to get worse, says Andy Brooks, head trader at mutual fund giant T. Rowe Price.
"It is pretty serious," says Brooks. "Stocks around the globe are down 9%." Stocks fell 9.6% in Tokyo, 8.3% in Hong Kong and were down only slightly less in major European markets.
The Dow, which was 550 points below Thursday's close in futures trading before the opening bell, seemed to be holding up fairly well, considering the steeps drops around the world.
Another bright spot is that both the Dow and the broader Standard & Poor's 500 index are still trading above their intra-day lows — 7773 for the Dow and 839.80 for the S&P — hit during the panic-led sell-off on Friday Oct. 10.
