Sources: CNN Money, Associated Press
U.S. stocks, amid continuing credit concerns fell again—with the Dow Jones dropping to below 13,000 for the first time since August 2007. This was also the fourth straight losing session—and with the high-tech NASDAQ index the biggest loser. Nasdaq lost nearly 1.7% on Monday. The Nasdaq saw the heaviest losses because more investors believe that the hi-tech stocks just cannot provide the economy with a cushion against the collapsing housing market. The broader S&P 500 slipped 1%. The Dow lost 4% just a week ago, and has fallen 8.53 percent since its record high on October 9th.
Much of the losses have stemmed from market nervousness from the continuing credit crisis. Last week several of Wall Street’s largest lenders had a series of write-downs. UK-based HSBC is reported to also have write-downs forthcoming. Furthermore, other recent bad news led to Monday’s severe losses. Countrywide Financial Corp., said in a regulatory filing that it could be severely limited if its credit rating drops into the junk bond status. E-Trade Financial Corp stated Friday that the value of its mortgage-backed securities has fallen significantly this quarter, and it would need to take bigger-than-expected write-downs. E-Trade stocks dropped 58.7%, to $3.55/share. Countrywide fell 64%, to $13.19/share.
Question: With the bad news continuing to come—what can be done to stop the continual loss of value in light of the seemingly unending credit crisis?
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When you step out of an airplane and realize you've forgotten your parachute the options are rather limited. Perhaps its time to think like a bird!
The ascent of the stock market was the triumph of greed over common sense. As with gravity, what goes up must come down.
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