Stocks Extend Plunge; Dow Falls 306 - 17th January 2008

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Stocks Extend Plunge; Dow Falls 306

Thursday January 17, 6:14 pm ET

By Tim Paradis, AP Business Writer

Stocks Extend Plunge As Manufacturing Index Falls; Bond Insurers Fall Amid Fears of Losses

NEW YORK (AP) -- Wall Street extended its 2008 plunge Thursday, sending the Dow Jones industrials down 306 points and to their lowest level since last March after a regional Federal Reserve report showed a sharp and unexpected decline in manufacturing activity. Downgrades of key bond insurance companies added to the market's black mood, with investors fearing an escalation of months of credit market problems.

The Dow lost nearly 2.5 percent, giving the index its worst three-day percentage decline since October 2002. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3 percent Thursday. The Dow, S&P 500 and the Nasdaq composite index have now given back all of the gains they achieved in 2007.

Stocks opened higher but quickly gave up their gains after the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9 from a revised reading of negative 1.6 in December. The latest number came in well short of what Wall Street had been expecting and underscored the seriousness of the economic worries that have gripped both Wall Street and Washington in recent weeks.

Credit concerns also dogged Wall Street after rating agency Moody's Investors Service placed bond insurer Ambac Assurance Corp. on review for a possible downgrade. That possibility alarmed investors because it would place all bonds insured by Ambac on review as well. Wall Street are concerned that bond insurers would be unable to absorb a spike in claims.

Investors' fears of a slowing economy, the consequence of a months-long housing and credit market crisis, dominated trading, as they have since the start of the year.

"The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession.

"It's not rocket science -- the economy is slowing dramatically, and it's being reflected in economic reports."

The Dow, which had been up more than 50 points early in the session, closed down 306.95, or 2.46 percent, at 12,159.21.

The Dow is now off 8.33 percent for the year; there have been just 12 trading days so far in 2008, but the index's frequent triple-digit losses have now forced it to give back its 2007 gains. The Dow had its lowest close since it ended the March 16, 2007, session at 12,110.41.

The Dow's decline also left it about 150 points above 12,000, a level it hasn't closed below since November 2006.

The broader market indicators also plummeted. The S&P 500 index lost 39.95, or 2.91 percent, closing at 1,333.25, and leaving it was a year-to-date loss of 9.2 percent, while the Nasdaq dropped 47.69, or 1.99 percent, to 2,346.90, giving it a 2008 deficit of 11.51 percent.

Thursday brought the lowest close for the S&P 500 since October 2006 and the worst for the Nasdaq since March of last year.

Declining issues outnumbered advancers by more than 5 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 5.41 billion shares compared with 5.25 billion traded Wednesday.

Bond prices rose as stocks fell and anxious investors sought the safety of government-issued securities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.63 percent from 3.68 percent late Wednesday. The dollar was mixed against other major currencies.

The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped nearly 17 percent Thursday.

Light, sweet crude fell 71 cents to settle at $90.13 a barrel on the New York Mercantile Exchange after Bernanke's prediction of slower economic growth this year. Slowing growth could dampen demand for oil.

The Philadelphia manufacturing reading caught Wall Street by surprise -- igniting fears that the economy is slowing precipitously and that policymakers might be too late in contemplating aid.

Economists had expected the Philadelphia index would come in at a negative 1.5, according to Dow Jones Newswires. Instead, the negative 20.9 figure was the weakest since October 2001 when the economy was reeling from the shock of the Sept. 11 terror attacks.

Jim Herrick, manager of equity trading at Baird & Co., contends that the Philadelphia Fed reading and other recent negative economic reports indicate the economy is likely in a downturn.

Other economic reports added to investors' glum mood. The Commerce Department said housing starts plunged 14 percent to 1.01 million in December, marking the weakest pace of home building in more than 16 years. In addition, permits to build new homes dropped 8 percent last month to 1.07 million, the lowest level since 1993.

The week's steady flow of news, much of which has dented investor sentiment, has led to a growing chorus of calls for the Fed to cut rates. The Fed's monetary policy committee will meet Jan. 29-30 and is widely expected to lower its Fed funds target from the current 4.25 percent level. Bernanke on Thursday reiterated recent signals that the central bank will reduce rates for a fourth straight time.

Some on Wall Street have called for the Fed to intervene sooner with steep rate cuts.

The economic concerns come in a week in which some of Wall Street's biggest names have posted huge losses following bad bets on mortgage investments. Financial shares fell sharply Thursday after the reports have made clear that there is also increasing weakness in home equity and other consumer banking operations.

Merrill Lynch & Co. on Thursday posted a massive loss that underscored the depth of the economy's credit problems. The world's largest brokerage said it lost $9.91 billion in the fourth quarter, hurt by big write-downs from investments and trades battered by tight credit conditions.

John Thain, the new chief executive at Merrill, said he believes the red ink will constitute the bulk of the company's write-downs from its subprime mortgage exposure. But he would not speculate about what 2008 might hold in store in other areas. Earlier this week, Merrill secured a new round of capital infusions from foreign funds.

Merrill fell $5.64, or 10 percent, to $49.45.

Moody's announcement that it will review Ambac came after the insurer booked a $5.4 billion write-down on its credit derivative portfolio during the fourth quarter.

Ambac plunged $6.73, or 52 percent, to $6.24, while Ambac rival MBIA Inc. fell $4.18, or 31 percent, to $9.22. First Horizon National Corp. fell $2.43, or 13 percent, to $16.48 after Standard & Poor's Ratings Services lowered its rating on the bank's long-term credit.

The Russell 2000 index of smaller companies fell 19.34, or 2.76 percent, to 680.57.

Overseas, Japan's Nikkei stock average closed up 2.07 percent. Britain's FTSE 100 finished down 0.68 percent, Germany's DAX index fell 0.78 percent, and France's CAC-40 fell 1.31 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Link to this article: http://biz.yahoo.com/ap/080117/wall_street.html?.v=51

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Note: Updated Wednesday 17th June 2009 8.00pm Sydney Time. Love For Life does not support harm doing in any shape or form. However, we are supporters of free speech and post articles, documentaries, etc, that represent a wide cross section of ideas. See the Love For Life extensive research library where over 6000 documents, articles and videos are posted: http://loveforlife.com.au/issues. We clearly see the evidence of the destruction to MAN and the earth that has been caused by ALL religions over the centuries and are therefore not supporters of religions, cults, sects or any group that demands conformity of thought, speech or action, or has rules, regulations or rituals that must be followed. Religions, nationalities and cultural "identities" are formed as a result of the brainwashing we receive from childhood. They are part of the tactics the Establishment uses to keep us all divided from one another and fighting one another.

All religions promote discrimination and division, leading to hatred and even violence and murder. None of them have yet to produce a remedy to all the suffering, poverty, unhappiness and discrimination in the world. If any religion truly had the remedy to all the suffering on earth, there would no longer be any suffering. What have Christianity, Islam, Buddhism, Hinduism, Judaism, atheism and the New Age done to end the suffering in the world?

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The Love for Life website also shows how the Rule of Law, the Bar, the Government, the Monarchy, the system of commerce, the local, national and multi/trans-national private corporations, all the courses and careers on offer from our universities, all the educators, scientists, academics and experts, the aristocrats and the Establishment bloodlines have also done NOTHING to end the suffering in the world. The website maps the insanity of a world where there is no help for those in need, just as there was no help available for us when we were victims of terrible bank fraud: http://loveforlife.com.au/court_case (orchestrated, condoned and protected by an international crime syndicate/terrorist organisation of judges, barristers, registrars, lawyers, politicians, banksters, big business representatives, media moguls and other lackeys who, all together, put up a wall of silence despite our trying many, many avenues. After the family home was stolen and business destroyed we were left close to poverty and destitution caring for 4 young daughters. Three years later not much has changed regardless of all our efforts. Where were all the followers of all the religions to help us? Or do we have to be members of those religions to receive help from others involved in them?

We have been accused of being anti - Jewish because we had posted an excerpt from James von Brun's book: Kill the Best Gentiles! http://loveforlife.com.au/node/6054 in which he blames Jews for the problems of the world. Obviously this is not our view because of what we have stated above. We do not hate anyone, whatever religion they follow. We are always open to talk to any religious leader or politician and meet with any judge, member of the Bar, experts, academics, educators etc to share the remedy we offer that heals all the divisions between MAN and MAN, and MAN and the EARTH.

Today, a representative of the New South Wales Jewish Board of Deputies is threatening to close the website down, because they have decided it is anti - Jewish and that we promote racism. What has the New South Wales Jewish Board of Deputies done to end the suffering in the world? Can they show that they are concerned with the suffering of ALL men, women and children AND ARE SEEN TO BE DOING SOMETHING ABOUT IT or are they only concerned with Jewish affairs? If so, they, along with all the other religions that only care for their own, are part of the problem, not part of the solution. The man who rang Arthur today was only concerned with Jewish affairs; he was not interested in our intentions or in anybody else, just as most Christians, Muslims, Sikhs, Catholics, etc, are only interested in their own. While we separate ourselves into groups, dividing ourselves from others with rules, regulations, rituals, procedures and conditions, we will never solve our problems.

No matter what we in the Western World Civilisation of Commerce have been promised by our politicians, religious leaders, scientists, educators, philosophers, etc, for the past two hundred years, all we have seen is ever-increasing destruction of men, women and children and the earth. None of the so-called experts and leaders we have been taught to rely on are coming up with a solution and none of them are taking full-responsibility for the fact that they can't handle the problem. All religious books talk about end times full of destruction and suffering but why do we have to follow this program when there is an alternative to hatred, mayhem and death? Why are our leaders following the program of destruction and death rather than exploring the alternatives? It seems that any mainstream politician, priest or academic are only interested in supporting the RULES OF THE DIVIDE, that maintain the haves and the have nots. For 200+ years, 99% of the world population have been so trained to pass on their responsibility for themselves, others and the earth, that the 1% of the population that make up the leaders of the rest of us are making all the decisions leading to the destruction of all of us and the earth. Let's not forget the education system that brainwashes the 99% of the population that we are free and have equal rights while, in fact, we are feathering the nests of those at the top.

At the root of all our problems is self-centredness, an unwillingness nurtured by the Establishment that keeps us concerned only with our own needs rather than the needs of others around us and the Earth. Instead of creating and releasing acts of love for those around us as gifts to benefit them and the earth, we take, take and take, until there is nothing left. The whole point of the Love for Life website is to show people the root of all our problems and to share the remedy. The extensive research library is there to attract browsers and to provide access to information not available through mainstream channels. If the New South Wales Jewish Board of Deputies can, after careful examination of our work, prove that anything we are saying is wrong, we will be happy to accept their proof. If they cannot, and they are still insistent on closing the website down, they will be showing themselves to be traitors to MAN because they are not interested in pursuing any avenue that can end the suffering in the world.

All religions, corporations and organisations that support and maintain the Western World Civilisation of Commerce are part of the problem because our civilisation is a world of haves and have nots, racism, violence, hatred, poverty, sickness, discrimination, abuse, starvation, homelessness, corruption, collusion, vindictiveness, social unrest, arrogance, ignorance, fear, war and chaos. While we support civilisation, we support death and destruction because ALL civilisations that have ever existed are apocalyptic by design.

If we truly want peace on earth and freedom for all, we have to let go of all that which keeps us divided, and come together as MAN, conscious living co-creators of creation. The Love For Life website offers a remedy to the problems we all face in the form of DO NO HARM COMMUNITIES: http://loveforlife.com.au/node/3641 For more details see here: http://loveforlife.com.au/node/6511 and here: http://loveforlife.com.au/node/3385 - We also highly recommend that everyone read the brilliant Russian books called The Ringing Cedars: http://loveforlife.com.au/node/1125 - The Love For Life homepage/front-page also provides lots of inspiring remedy based information: http://loveforlife.com.au - If you want to be kept up to date with our work please register to the Love For Life mailing list here: http://loveforlife.com.au/campaign_list We usually send two postings per month. Presently there are over 5000 registrations reaching over 200,000 readers globally. The website now receives over 2 million strikes per month with June 2009 heading close to (or over) 3 million strikes.

Conscious Love Always
Arthur and Fiona Cristian
Love For Life
17th June 2009