Global, US Market Updates

UPDATED 7:20pm EST:

New York Times: Dow Ends Flat After Day Of Gyrations

A day that loomed darkly on Wall Street ended with only a modest decline in the overall market and the Dow Jones industrials in an unlikely place: positive territory.

A floor trader at the Hong Kong Stock Exchange on Monday. More Photos »

The Dow finished up 21 points after gyrating wildly through much of the session, from a loss of almost 200 points to a gain of 100, in one of the most volatile trading days in months.

But shares of most financial firms plummeted as one of Wall Street's most storied banks, Bear Stearns, lay on its deathbed and central bankers scrambled to stave off a devastating crisis of confidence in the financial world.

UPDATED 12:10 EST:

AP: Stocks Down After Bear Stearns Deal

Wall Street fell in temperamental trading Monday as investors grappled with news of JPMorgan Chase & Co. buying the stricken Bear Stearns & Co. in a deal backed by the government. The Dow Jones industrials, down nearly 200 points in the early going, fluctuated into positive territory and then sank again by more than 100 points.

A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it. And some unprecedented moves by the Federal Reserve gave the market a bit of solace on what many predicted would be a day of precipitous losses in the stock market.

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UPDATED 11:30am EST:

AP: U.S. markets rally after early morning declines:

Wall Street clawed back from sharp losses Monday, with investors snapping up bargain stocks after JPMorgan Chase & Co. bought stricken Bear Stearns & Co. in a deal backed by the government. The Dow Jones industrials, down nearly 200 points in the early going, fluctuated in and out of positive territory.

AP: US markets pull back after steep open:

Wall Street retreated Monday as Wall Street and other global markets reacted to JPMorgan Chase & Co.'s government-backed buyout of the stricken investment bank Bear Stearns Cos.

On top of supporting the buyout, the Federal Reserve took the extraordinary step of lowering the rate it charges to loan directly to banks on Sunday night -- two days before its scheduled meeting Tuesday. The central bank lowered the discount rate by a quarter point to 3.25 percent.

AP: Dow trades down 182 points after markets open:

In the first minutes of trading, the Dow Jones industrial average is trading down 182 points at the 11,768 level.

Reuters: US Dollar drops after weekend Fed action:

The dollar tumbled to a 12-1/2 year low against the Japanese yen on Monday and record lows against the euro and the Swiss franc as liquidity-boosting measures launched by the Federal Reserve over the weekend failed to quell worry about the health of the U.S. financial sector.

The dollar reacted to the Fed taking emergency measures to stem the fast-spreading financial crisis, cutting its discount rate by 25 basis points to 3.25 percent on Sunday and opening up discount window lending to major investment banks, a tool not used since the Great Depression.

AP: Bush says his Administration is on top of the situation:

President Bush says his administration is on top of the situation in dealing with the slumping economy.

Bush says that the country is in challenging times. But he also says another thing is for certain: " We've taken strong decisive action."

NY Times: Global Markets In Free Fall:

Stock markets across Europe fell 2 to 3 percent soon after opening on Monday, following drops on major Asian stock markets of 3 to 5 percent. Tokyo's benchmark index hit a three-year low before it rebounded slightly; Chinese and Indian stock markets tumbled even more sharply.

In the United States, stock futures plunged overnight, indicating that the markets would open to heavy losses. Futures in the Dow Jones industrial average were down more than 200 points.

Comments

[mincepies]

1) Subprime mortgage is based on the principle of gouging poor and less well off people by charging them far higher interest rates for loans. The poorer you are, the worse your credit rating, the higher the rate of interest you pay. Its completely, utterly immoral.
2)Instead of letting the geniuses who came up with the above go bust, the American tax payer (in the form of the Federal Reserve), is now paying to make sure that the bankers responsible get to keep their ridiculous salaries and bonuses. The govt, through the wrong kind of regulation, has ensured that shareholders have little or no say as to the compensation of senior execs in publicly traded companies allowing the best connected incompetents to maintain their incomes and positions.
3)Having sold our gold reserves, the govt simply prints as much cash as it needs. As the $ collapses in value, investors fly to commodities and the price of everything goes up at ever inflating rates. The only possible outcome is to raise interest rates dramatically.

The Iraq war has delivered the USA a rightful reputation for total incompetence and corruption at the very highest levels of our govt which will continue to undermine confidence. We are in an extremely serious mess - no mistake.

[ethancorso]

The current economic mess ensures that vast amounts of wealth will be further consolidated. This is an unmitigated disaster, and part of the foundation of a fascist state.

[kfdan]

The great depression was purposely instigated by the large financial cartels to consolidate the wealth and ... here we go again. I wonder when the American people will end this type of madness! Good time to rethink the viability of the FED and investigate the whole prime loan scam!
Thanks Bush for a great Presidency!!! Now, shut-up, try not to do anything more damaging and crawl back under a rock!

[kirotahoe]

this is not at all surprising. those with vision saw this as early as 2002. the reason the dollar is worth so little, americans have lost millions of jobs, we are hated be much of the world, we have sold our future for the luxuries of the present. and this is almost all to be laid at the foot of the worst president in american history. he will make hoover look like a genius. just look at w's track record in business, school and life. he is a failure and always has been. it is astounding he was elected once, much less twice. by turning the country over to bush and his ilk, we have made out bed and now must sleep in it.

[spiffarino]

The bitter end of the Reagan Revolution­...mmm...s­mell the Schadenfreude.

[754]

"President Bush says his administration is on top of the situation."

Never were more chilling words spoken, given the history of corruption and incompetence of the Bush administration. W has the opposite of the "Midas" touch; everything he touches turns to shit.

We've only started to experience the economic implosion that we've allowed these Republican criminals to inflict on our country: the deficit spending caused by tax cuts for the rich, the massive expansion of the national debt to pay for the war in Iraq that was started on a lie, and, the gutting of economic safeguards which facillitated the massive expansion of consumer debt. All in the name of a mythical, unfettered, self-regulating "free market", which through deregulation has become a parasite that will bring down our country if balance is not restored. The situation is even more dire than is described by administration published statistics as the statistics that are published are two months old and are cherry-picked to give the appearance of a "slowdown" rather than the meltdown that is occurring.

God help us all because with Republicans in charge our country has been robbed blind of of its economic strength- which is our true source of power in the world. Waiting nine months to change course is suicidal. In the next few months Bush/Cheney will find a way, with a rubber stamp Democratic congress, to: 1) further expand executive power, and 2) funnel even more money into the pockets of rich folks. If Pelosi and Reid don't do something to slow this avalanche down (any meaningful resistance on any issue would be nice for a change) then we're in for an economic depression the likes of which would make Argentina grimace.

[LehiBoy]

I am borrowing money against my house to buy stocks because I am confident President Bush is on top of things. After all, he was on top of things with 9-11, Katrina, Iraq, why shouldn't I believe him????

[lincat]

Gee, could you take the picture of Dubya down. I can't stand looking at it.

[BadgersBite]

Reporter to Bush: Are on drugs or just stupid?

Bush: I do not take drugs!

[JoeBlough]

Is this the culmination of the Reagan Revolution? Reagan said Government was the problem and not the solution. He started the de-regulation of business and financial insitutions. Said they will be self-policing. It became every man for him self and this is the result. Now that we are a second-rate country, can we turn over the Iraq occupation to a stronger country

[speakingtruth2power]

Curious that the leading critic of predatory lending and the guy leading a state's revolt

against the economic mishandling of BushCo was busted by his bank, the IRS & FBI.

Elliot Spitzer had all fifty states aligned against the destructive policies of the Bushies

and had to be destroyed and discredited for basically acting like he was like a rethug!

[shockmagog]

They cheered the destruction of the one man who could ultimately save them.

Irony may be a difficult concept for "free marketeers" to grasp in this case.

[speakingtruth2power]

They thought he was just a party pooper
since they all insisted that debt is good.

[shockmagog]

A perfectly predictable result of our laissez-faire, faith-based, and Corporate Welfare economy.

Let's go shopping.

[mari2JJ]

Yes, the result of faith-based monetary management. do really stupid things and have faith that God will intervene. They have great faith that with tax breaks for the super rich, unregulated businesses that have made off like bandits, a war that further transferred our national treasure (if we had any) to companies like Halliburton, and finally, war profiteers that provided lousy equipment to our military,. Now we can stand back and see the full load of garbage this administration has dumped on us. Some management style, eh?

[Ammobob]

I watched a report on the MSM channel this A.M. which told the story of a CA homeowner who bought her house for $300K when it was appraised at over $400K, thinking she had made a great deal. Proceeded to dive into the 'equity' and SPEND the money, then the market dropped out from under her. Now, the house is appraised at 200K and she's saddled with debt. Oh, did I say she also bought a new SUV with the equity money? And she has the AUDACITY to blame the government. No offense OBAMA, but that's AUDACITY with a capital "A".

[wayoutleft]

thats right lmaobob. and your government will help make sure she isn't homeless. just like it will make sure that whoever used her worthless paper to collateralize its own borrowing doesn't destroy thousands of lives, of families, when it tanks.. you will be part of this society and you will help people in trouble. so pack your wadding and listen to the rest of rush. you will never fulfill your darwinist fantasies of unleashing your greed and leaving the poor and weak behind. the society at large will never let you do that. it's too bad they can't take your car and house in lieu of the $75 grand per person the country has borrowed to lose the war you say you won but need an army taking casualties sitting there for 100 years.

[nofltwlt]

Nothing will improve until Bush and his band of merry men are removed from office, indicted and jailed for their crimes against our nation and our freedom.

[mtaylor90028]

careful. you sound like a terrorist

[sammy333]

CNN is working really hard to make sure that the current policies of war and economic rape continue uninterrupted. A typical news spectrum:
- Obama is bad
- Dollar loosing most of its value is OK if you eat dinner in Paris during lunch time (cheaper).
- Hillary/McCain will keep us safe (by continuing the current policies).
- nothing about the real issues.

The distortion of reality reached the Goebbels heights.

[LiberalMajority]

Somewhere out there in the world, someone is making a killing. Strong investors in the gold and metals commodities are going to be able to buy it all back up for pennies on the dollar. So what is the Carlyle Group up to lately ? (not Carlyle Investment Management, different group I believe, they were tied up with the BS crash)