Global stock markets collapse, Dow plunged 500 points

NEW YORK (AP) – Gripped by fear of a new recession, the stock market suffered its worst day Thursday since the financial crisis in the fall of 2008. The Dow Jones industrial average fell 512 points, its ninth-steepest decline ever.

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The sell-off wiped out the Dow’s remaining gains for 2011. It put the Dow and broader stock indexes into what investors call a correction – down 10 percent from their highs in the spring.

“We are continuing to be bombarded by worries about the global economy,” said Bill Stone, the chief investment strategist for PNC Financial.

Across the financial markets, the day was reminiscent of the wild swings that defined the financial crisis in September and October three years ago. Gold prices briefly hit a record high. Oil fell even more than stocks – 6 percent, or $5.30 a barrel. And frightened investors were so desperate to get into some government bonds that they were willing accept almost no return on their money.

It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. The Dow has lost more than 1,300 points, or 10.5 percent. By one broad measure kept by Dow Jones, almost $1.9 trillion in market value has disappeared.

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World heading towards another financial crisis?

For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest point decline since Dec. 1, 2008.

Thursday’s decline was the ninth-worst by points for the Dow. In percentage terms, the decline of 4.3 percent does not rank among the worst. On Black Monday in 1987, for example, the Dow fell 22 percent.

Two weeks ago, investors appeared worried about the deadlocked negotiations in Washington over raising the ceiling on government debt. As soon as the ceiling was raised, investors focused on the economy, and the selling accelerated.

On Thursday, growing fear about the weakening U.S. economy was joined by concern in Europe that the troubled economies of Italy and Spain might need help from the European Union.

b --[/b] Asian stock markets are recording sharp declines Friday, extending a global equity sell-off after Wall Street had its worst day since the 2008 financial crisis.

Australia’s All Ordinaries dropped 4.3%, Japan’s Nikkei shed 3.5% and South Korea’s Kospi lost 3.6%.

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A trader’s reaction in Philippines stock exchange, the Philippines Exchange fell 130 points as of now

The Dow tumbled 512 points Thursday – its ninth deepest point drop ever – as fear about the global economy spooked investors.

“The conventional wisdom on Wall Street was that the economy was growing – that the worst was behind us,” said Peter Schiff, president of Euro Pacific Capital. “Now what people are realizing is the stimulus didn’t work, and we may be headed back to recession.”

U.S. markets were already sharply lower on widespread worries, including the weak job market. But the selling gained momentum as Japanese and European policymakers stepped in with dramatic measures to shore up their financial markets.

There’s “total fear” in the market, said Bob Doll, chief equity strategist at the world’s largest money manager, BlackRock.
Markets nosedive amid ‘total fear’

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All three major indexes tumbled more than 4% Thursday and erased all their gains for the year. The indexes have also pushed into “correction” territory – defined as a 10% drop from recent highs. The Dow, Nasdaq and S&P 500 have all fallen 10% in just the last 10 days.

“In the last two weeks, we’ve been through the ringer,” said Rich Ilczyszyn, market strategist with futures broker Lind-Waldock. “When we start looking at the recovery, there’s nothing to hang our hats on anymore.”

The market’s fear gauge – the VIX – surged 35.8% to a reading of 31.8. A level above 30 signals a high degree of fear.

At the closing bell, the Dow Jones industrial average was down 512 points, or 4.3%, with Alcoa, Caterpillar and Bank of America among the biggest drags on the blue chip index. Thursday’s sell-off marked the steepest point loss since October 2008.

The S&P 500 was down a staggering 60 points, or 4.8%.

The Nasdaq lost 136 points, or 5.1%. Some of the better performing tech stocks, Apple, Google and Netflix were all down between 2% and 3%.

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Woman walking across the French exchange board, France stock market tumbled 135 points

Fears about a global slowdown are at the forefront of investors’ minds amid recent weak economic data. Early Thursday, the latest reading on jobless claims showed a large number of Americans remain unemployed.

Adding further to investors’ jitters, Wall Street is waiting for Friday’s jobs report, which BlackRock’s Doll said was adding to the selling pressure.

European stocks plunged. Britain’s FTSE 100 tumbled 3.4%, Germany’s DAX lost 3.9% and France’s CAC 40 fell 3.4%.

In commodities, oil prices slumped 5.3% to $86.63 a barrel.

Source:

http://edition.cnn.com/2011/BUSINESS/08 … ts.friday/

http://www.nytimes.com/2011/08/05/business/markets.html

http://www.watoday.com.au/business/stoc … watoday_sb

http://business.financialpost.com/2011/ … omy-fears/

i am actually rooting for wall street to collapse. then grandma and grandpa can go back to basic to days when interest rate were around 5%. that way they can rebuilt the economy on a clean slate. with most pensioners saving wiped out, not only the poor but the middle class too has venom for wall street and the govt.

this ugly collusion between wall street, defense contractors and washington has to stop someday. they cannot go on printing monies freely and ravaging world economies and involved in foreign war adventures at their whim and fancies.

all those countries that have their gold parked in america and think it is in safe hand? try sending your war ships there to demand your gold back. your gold is as good as gone, burnt.

the recent deal to raise debt ceiling by obama just bought america another year or two. no way can it pays back its debt to the world. its collapse is imminent and its dollars worthless soon. already the rating agencies are out with the butcher knife.

america is already a bankrupt nation. and the saddest thing is that its ordinary people will be the last to know.

source: http://rt.com/programs/keiser-report/keiser-report-170/

Few months ago, people are painting rosy bullish pictures all over, sucking new investors into the markets. Just feel sorry for them, many lost 20-50% of their money since May.