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Hope Is a Four-Letter Word: Dow Slumps to 11-Year Low
Posted Feb 23, 2009 04:47pm EST by Aaron Task in Investing, Recession
In the absence of major economic or corporate news, traders' continued to focus on macro issues like fears of a global recession crippling corporate profits. In turn, they punished economically sensitive Dow stocks like Alcoa, which fell to its lowest level since 1988; meanwhile, DuPont hit its lowest level since 1991, GE hit its since 1995, Intel since 1996 and Boeing since 2003, Bloomberg reports.
Reports of a potential new new plan to shore up Citigroup did help the ailing bank and its kissing cousin Bank of America, which respectively rallied 11.3% and 2.6%. But just about everything else fell by the wayside, leaving the S&P 500 down 3.5% to 743, its lowest close since April 1997, while the Nasdaq shed 3.7% to 1388.
If the proposed plan for the government to convert its $45 billion of Citigroup preferred stock into common equity falls is to be believed, the Obama Administration appears intent on continuing the policies of its predecessor: Doing everything and anything to avoid nationalizing the nation's biggest banks, even if they are (almost certainly) insolvent and even if we're repeating the mistake of keeping "zombie" banks alive, something U.S. policymakers have long criticized Japan for doing.
Whatever the "right" course of action visa vis the banks, the market is clearly giving a major thumbs down to Obama's early economic policies, be it Treasury Secretary Geithner's "Financial Stability Plan," the fiscal stimulus bill (nicknamed: "porkulus"), last week's plan to stem the housing decline, etc. etc.
Monday's slide only ratchets up the pressure on this week's other government-sponsored economic events, although it's entirely possible the market was going down no matter what Obama - or anyone else - did (or does).
If there's any silver lining for the bulls, it's that the S&P did close above its November 2008 intraday low of 741. But while a short-term bounce seems likely, it's hard to see how that thin reed won't ultimately snap too under the weight of the worst bear market in (at least) a generation.
171 Comments
Yahoo! Finance User - Monday February 23, 2009 04:57PM EST
Obama and his friends in the media like CNN Money, CNBC, WSJ, NYT, etc are running a scam on Americans and in every other country in the world. Why do you think Obama put so many of these people to work in his administration when he got elected? So the media would kiss Obama's rear end and not take him to task for being an absolute idiot. Speaking of CNBC -- Trish Regan, better keep your face out of the ice cream to cure your GE depression. You seem to be looking a bit porkey.
Ray - Monday February 23, 2009 05:01PM EST
Foreign stock holders are a major impediment to receivership and nationalization. How about a segment on which countries (and their banks) are major shareholders in the American banks?
Yahoo! Finance User - Monday February 23, 2009 05:02PM EST
Remember the "Man from Hope"? How we have Obama's Hope. Situation Hopeless; they have no idea what they are doing, but they sure love to talk, talk, talk! The economy will never turn around until this country actually makes something that somebody else wants. Selling Hanna Montana to the globe will not work, we are all gonna be slum dogs minus the $million.
morecloudydays - Monday February 23, 2009 05:05PM EST
just 30 + days ago it was george cluelss bush; i guess we now think all these problems were created by the current administration. pretty insightful........... how about some solutions beig implemented...........unless someone has a better idea. and what might that be. let th money center banks fail.........let unemployment rise more and let states go out of business.
Yahoo! Finance User - Monday February 23, 2009 05:08PM EST
It's just incredible what is happening in this country! Obama must GET OUT! This moron is creating Great Depression II. How it's possible to get stimulus through spendings? We got in this mess because of that! How it can help to put confidence in country calling Catastrophe or "Irreversible Recession"? Sucker run for next campaign to push PORK bill in Florida (the biggest housing bubble), Indiana ( RV Plant and 15% unemployed) and Arizona. He is killing the left overs of US economy.
Yahoo! Finance User - Monday February 23, 2009 05:09PM EST
For years and years the Japanese were criticized for their actions in the 1990s and now these guys do the exact same thing. This is a mockery, big shot banker men cuddling with civil servant ideologues.
Shane - Monday February 23, 2009 05:09PM EST
The best day to start a new business is the last day of a recession. Everything goes in cycles.
WillyW - Monday February 23, 2009 05:15PM EST
How long till Obama's shilling media buds turn on him? Surely even the most enamored of the annointed one can't keep up their charade much longer. After 1 month it's becoming obvious this idiot in the White House doesn't have a clue. All he had to do was open his mouth in front of a camera during trading hours and the market falls off a cliff.......Amen to the Reagan question?
STORMSTOCKER1 - Monday February 23, 2009 05:15PM EST
IT'S NOT OBAMA YOU DUMMIES, AND IT IS NOT BUSH !! IT IS YOUR CONGRESS THAT YOU IDIOTS KEEP VOTING BACK INTO OFFICE,11% approval rating to boot!! THEY ARE THE ONES THAT "VOTED FOR FANNIE AND FREDDIE,TARP, BAILOUTS , NAFTA, A RAISE FOR THEMSELVES, BETTER BENEFITS FOR THEMSELVES, MORE TRAVEL FOR THEMSELVES, while the american taxpayer is taking it in the shorts.!! VOTE THE BUMS OUT NEXT TIME!!
STORMSTOCKER1 - Monday February 23, 2009 05:17PM EST
AGAIN FOLKS!! ITS NOT OBAMA AND ITS NOT BUSH!! IT IS THIS INCOMPETANT CONGRESS THAT YOU ALL KEEP VOTING BACK INTO OFFICE WITH THEIR 11% APPROVAL RATING!! VOTE THE BUMS OUT NEXT TIME!!
STORMSTOCKER1 - Monday February 23, 2009 05:17PM EST
AGAIN FOLKS!! ITS NOT OBAMA AND ITS NOT BUSH!! IT IS THIS INCOMPETANT CONGRESS THAT YOU ALL KEEP VOTING BACK INTO OFFICE WITH THEIR 11% APPROVAL RATING!! VOTE THE BUMS OUT NEXT TIME!!
Heroine Worshipper - Monday February 23, 2009 05:17PM EST
Great writing from the Task man. You could never put this on CNN.
- Monday February 23, 2009 05:18PM EST
If one adjusts the Dow for compounding inflation going backwards, one realizes that the Dow's low today corresponds with a point much further back than 11 years ago. It seems that the inflation adjusted Dow is commonly overlooked for true comparison purposes.
Bob - Monday February 23, 2009 05:19PM EST
Hire U. S. citizens. Send the foreign workers back to their homes. Everybody expects a turn around now, This recession will take time. The bleeding hearts have no stomach for any suffering. This is the bad part of capitalism, but the good far outweighs the bad of socialism which is what the Dems and their friends are pushing.
Advisor - Monday February 23, 2009 05:21PM EST
If boa was to fold I would not fell one bit sorry for them they are in trouble and they know it. P.S cant wait to next years Super bowl party how many millions do you think the Government will give you.
kerry b - Monday February 23, 2009 05:22PM EST
This is getting totally absurd. The media should take a sabbatical and stop publishing BS. "The recession that seems to have no end" is perhaps the dopiest claim yet - the recession began exactly 6 WEEKS ago, thanks in part too the brainless media telling everyion for the past two years that it was imminent. Kill all the journalists and perhaps we'd go about our business and quit worrying about a few points of GDP drop. Like who gives a damn if 9% rather than 6% are unemployed? This media hype of "pain and suffering" is a total joke. Just looking for headlines, as usual. No ethics.
Average Joes - Monday February 23, 2009 05:22PM EST
So when exactly IS the "last day of a recession"? I mean, if you have a specific date in mind please let me know so I can get back in business! FYI, it's also best to buy low and sell high. Any dates on those as well?
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__A_YAHOO_USER__ - Monday February 23, 2009 04:52PM EST
You guys both rock--keep it up!! Keep pushing for nationalization and sound economic decision making!! You are echoing the frustration felt by American taxpayers around the country, and a voice of reason in the sea of idiocy that is the mainstream media.