Tuesday October 07, 2008

Dow Jones closes below 10,000 points for the first time since 2004

cnn.com :

The Dow Jones on Monday [6 Oct 2008] closed below 10,000 points for the first time since 2004, as US stocks followed Europe and Asia. Government bank bailouts on both sides of the Atlantic failed to stem slowdown fears. The Dow slumped more than 800 points during afternoon trading but a late rally saw it close at 9,955.50. The slides come on the back of days of unrelenting financial turmoil and despite US lawmakers agreeing a $700 billion bailout plan. Oil prices were lower, with NYMEX light crude oil for Nov 2008 delivery falling below $90 for the first time since Feb 2008 to settle at $87.81 a barrel.

- The Dow Jones index dropping below 10,000 points is a major psychological blow. The interesting thing is how it is now looking like the US stock markets seem to be following the Asian and European markets and not the other way round, like the proverbial tail wagging the dog.

But if you look at it from another, admittedly rather twisted point of view, if last week's 777-point drop in the Dow was "technical blackmail" for the US Congress to pass the $700 billion bailout package, then this Dow drop below 10,000 in conjunction with the world's markets falling off the cliff might just be the factor needed to push the world's central banks to embark on co-ordinated intervention efforts, i.e. interest rate cuts, massive liquidity injections and such. I wouldn't count it out - markets are known to do the most perverse things.

See also :

1. S&P 500 sinks most since 9/11, Dow Jones drops 504.48 points on financial system meltdown

(2008-10-07 08:59:28 SGT) [Biz] Permalink

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