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US traders relieved despite Dow ending down 4 percent
(Agencies)
Updated: 2008-10-25 09:39 NEW YORK -- If ever a 300-point loss on Wall Street could be a good thing, it was Friday.
Wall Street started the day with a nervous eye on how far stocks would have to fall before triggering emergency trading halts. They ended the session relieved, even though the Dow Jones industrial average closed down 312, or 3.6 percent, its lowest finish since the financial crisis began six weeks ago. Stock markets in Europe and Asia had plummeted, and oil prices plunged past their lows for the last year on growing fears of a global recession. Major indexes declined more than 14 percent in Russia, and were ordered closed until Tuesday. Dow futures, a bet, before trading opens, on where stocks would go, had plunged 550 points Friday morning, triggering a temporary trading halt. "This is beyond volatile. It is chaotic," Carl Weinberg, chief economist at High Frequency Economics wrote in a morning note to clients. "This is the kind of day when the central banks step into the market with an 'unexpected' interest rate move to calm things down." Instead, it was just another day's loss, one in a series since mid-September that have erased nearly $7 trillion in value from stocks. Before US markets opened, CNBC flashed a rundown on the level of losses that would trigger trading circuit-breakers, which close the market after steep losses. The first circuit-breaker, a 90-minute halt, would kick in if the Dow lost 1,100 points before 2 p.m. The Dow fell more than 500 points in the morning, but steadied itself, even though the only good news was the 5.5 percent increase in September existing home sales. That was tempered by median home prices, which dropped to $191,600, down 9 percent from a year ago. The Dow closed at 8,378, its lowest finish since 8,306 on April 25, 2003. In the last six weeks, the Dow has experienced triple-digit moves in 27 of 30 trading sessions. Broader indexes also fell more than 3 percent. The paper loss for the week on the broadest stock index, the Dow Jones Wilshire 5,000, was $800 billion. A sell-off Wednesday, coupled with the losses Tuesday and Friday, gave the index its eighth-worst week since 1979. The index closed at its lowest level since May 2003. Total losses in the Dow Jones Wilshire 5,000 since the market's October 9, 2007, high are $8.8 trillion, or 44 percent. |
