Friday, October 24, 2008

Detour their's a muddy road ahead.....zzzzzZZZZ

Stocks head for sharp decline on recession fears

By STEVENSON JACOBS – 36 minutes ago

NEW YORK (AP) — Wall Street headed for another precipitous drop Friday as fears of a punishing global recession stirred panic among investors and sent world financial markets into a tailspin. The Dow Jones industrial average futures fell 550 points, triggering a halt in selling of stock future contracts.

The massive decline was caused by increasingly grim news from overseas. In Japan, shares of Sony sank more than 14 percent after it slashed its earnings forecast for the fiscal year. In Germany, Daimler's stock dropped 11.4 percent in morning trading after it reported lower third-quarter earnings and abandoned its 2008 profit and revenue guidance.

Japan's Nikkei stock average fell a staggering 9.60 percent. In Europe, Germany's benchmark DAX index was down 10.76 percent, France's CAC40 dropped 10 percent while Britain's FTSE 100 sank 8.67 percent after the government said its gross domestic product fell 0.5 percent in the third quarter, putting the country on the brink of recession.

The dour outlook convinced investors that the world economy is headed for a long and severe downturn despite a raft of government rescue efforts aimed at pulling the financial system from the brink. It also indicated that the tremors caused by the global credit crisis may have only begun to be felt in their true scope and magnitude.

"There's a lot of panic out there today," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "People have been saying that we're in a recession. This is the realization."

Fearing more carnage in world equity markets, big hedge funds and other institutional investors have been pulling out their money en masse in a bid to reduce risk and raise cash — a process known as deleveraging that only intensifies the selling. Meanwhile, individual investors that have seen their holdings decimated in recent weeks have been yanking money out of mutual funds, adding to the downward pressure on markets.

"I think it would be natural to make an assumption that there are some funds in trouble and that we may see some funds shut down," Fullman said.

Ahead of the market's open, Dow Jones industrial average futures fell the maximum allowed limit of 550, or 6.27 percent, to 8,224. That triggered "circuit breakers" that automatically freeze selling until the market's 9:30 a.m. EDT open. However, traders can still buy stocks and send the market higher.

The Standard & Poor's 500 index futures index was also down the maximum allowed 60 points, or 6.56 percent, to 855.20, and the Nasdaq 100 index futures was down the maximum allowed 85.00, or 6.20 percent, at 1,175.75.


  1. "Brother, can you spare a dime?"

    That was back when a hamburger was a dime.

    Now they're five Federal Reserve Notes, soon to be fire starter for burn barrels!

    "Brother, can you spare some paper so's I can start a fire for a rat-burger!"

  2. ):...zzzZZZ

    You got it brother. Do you have a chip scanner, I loaned mine to the Highwayman so he could buy some wirecutters. Are you sure that's a rat Dad, looks like Giuliani to me...G:

    ,,,,,,,G; trail of tears