Dow Dips Below 8,000 As Bush Gives Economy Speech
The stock markets did close today with a slim bounce back from their previous fallen position.
Stocks ended with slim declines Friday, as investors fought back from a decline of as much as 697 points on the Dow amid the global market meltdown.
Credit markets remained tight, although short-term lending showed some improvement from recent days. Treasury prices fell, raising the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil, gas and gold prices fell.
The Dow Jones industrial average (INDU) lost 50 points, or 0.6%, according to early tallies. It was the eighth down-day for both the Dow and the S&P.
Within the first five minutes of trade, the Dow had plunged 697 points, falling below 7,900 to its lowest level since March 17, 2003. The Nasdaq and S&P also hit more than five-year lows. But stocks recovered abruptly, with the Dow erasing losses. The afternoon saw the Dow make violent swings back and forth across the breakeven line, toppling as much as 600 points and rising 322 points.
I think we've seen more speeches by president George W. Bush in the last month on the economy than in most of his presidency. The lowest-rated president in American history warned investors not to panic in a speech this morning, saying 'anxiety can feed anxiety'.
As he was giving this speech, the Dow plunged below 8,000, dropping 660 points in the first few minutes of trading, the lowest since 2003.
“Anxiety can feed anxiety,” President George W. Bush said in a White House speech,
The speech focused on efforts to address problems.
“The Federal government has a comprehensive strategy and the tools” to address the crisis, he said.
"I'm confident in our economy's long-term prospects. We'll get through this deal," he said.
Yet with world markets already rattled over the U.S.'s financial woes, Bush and his advisers have seemingly concluded the only way to express that confidence is in short, measured statements. While the president did deliver a primetime address to the nation last month focusing on the financial crisis, he has not held a formal news conference since July 15.
NowPublic member Master Jim suggested some tongue-in-cheek advice for investors, but also showed how much people might have lost with stocks in the last year:
I know this is tongue in cheek advice for serious times, but hey, we need to see some humor in today's FUBAR world.
If you had purchased $1000.00 of Nortel stock one year ago, it would
now be worth $49.00.
With Enron, you would have $16.50 left of the original $1000.
With WorldCom, you would have less than $5.00 left.
NowPublic member Mikasi also has a story talking about whether the struggling markets will actually have a negative effect on the American government:
It would be well worth your time to read this exclusive story from Bloomberg. It talks about not just what we've spent so far, but what we're going to spend like it or not. The numbers this comes up with are truly frightening.
We've got NP member DCPSR's story on McCain's campaign manager Rick Davis talking about a presidential candidate's ability to affect the stock market:
Stunning. Here is Rick Davis’ response when asked about the stock market and the McCain response …
“There’s very little a candidate for president can say and very little the president can say about what’s happening in the stock markets except hope that they correct themselves,” Davis said, adding that McCain’s mortgage plan could be an “elixir” for the financial crisis.
War on Terrr's posted another story about Bush's speech today.
Leveraging his considerable experience in fighting negative emotions like 'terror', George W. Bush identified yet another ominous enemy of the state. This time it's not terror but 'uncertainty'.
In volatile trading, the Dow and S&P 500 retreat back into the red, although losses are modest relative to recent action.
At session lows, the Dow, S&P 500 and Nasdaq traded with losses of 8.1%, 6.0% and 7.7%. At recently reached session highs, the Dow, Nasdaq and S&P 500 were up 1.3%, 1.5% and 1.0%, respectively.
Global market were feeling the crunch again today as well:
Asian stocks plunged on Friday, as the US dollar rose to a 14-month high against a group of major currencies, on panic that global efforts so far have failed to stop financial chaos from spreading.
Japan's benchmark Nikkei fell 10%, Hong Kong's Hang Seng lost 8%, South Korea's Kospi fell 7.4%, Shanghai's benchmark gave up 4.1%, Singapore's Straits was down 7% percent and Australia's ASX-200 fell 6.8%.
Meanwhile, gas prices per barrel are dropping quickly, yet prices haven't quite matched the steep decline:
How about below $3?
After plummeting 91 cents in 25 days, the price is expected to fall another 30 cents per gallon in West Michigan.
The one-year anniversary of the Dow Jones Industrial Average’s all-time closing high of 14,164.53 was greeted with a rousing 200-point rally shortly after the market opened on Thursday. But the celebration proved to be short-lived as the Dow fell more than 7% by the end of day, closing at 8579.19, or just shy of 40% off the record high.