Stocks extend plunge; Dow falls 300

[Faygo Kid]

Source: Associated Press

NEW YORK - Wall Street extended its 2008 plunge Thursday, sending the Dow Jones industrials down 306 points and to their lowest level since last March after a regional Federal Reserve report showed a sharp and undexpected decline in manufacturing activity. Downgrades of key bond insurance companies added to the market's black mood, with investors fearing an escalation of months of credit market problems.

The Dow lost nearly 2.5 percent, giving the index its worst three-day percentage decline since October 2002. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3 percent Thursday. The Dow, S&P 500 and the Nasdaq composite index have now given back all of the gains they achieved in 2007. . .

. . ."The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession.

"It's not rocket science — the economy is slowing dramatically, and it's being reflected in economic reports.". . .



Read more: http://news.yahoo.com/s/ap/20080117/ap_on_bi_st_ma_re/wall_street;_ylt=Aloo8egAiabq2nfYIIGso_2yBhIF

---

I have a feeling we may not hear Rush Limpballs and his ilk trumpet this news, and you can bet Faux News will downplay it, as well. But, it's clear the economy is tanking badly. Bush will propose more tax cuts for the rich and tax breaks for the oil companies and the like, but I don't think people are drinking that Kool-Aid any more.

[Emillereid]

1. Boy am I glad I got out of the market!

[NanceGreggs]

2. "But I don't think people are drinking that Kool-Aid any more."

Exactly.

That Kool-Aid has a decidedly bitter taste when the guy choking on it is you, Mr. Republican Bush-Supporter, and not Mr. Librul Democrat next door.

Reality bites - and a lot of former GOP supporters are just beginning to notice the teeth-marks on their own asses.

[greyghost]

11. LOL! Your ability to turn a phrase is unmatched on these boards.

[high density]

3. I'm buying on the way down

A 3% drop today means little to me in 2045. If you have money that you need to use in less than ten years that's completely exposed to equities then your money is in the wrong place.

[ozone_man]

4. Buy at the bottom.

We've got a long way down to go. We're entering a bear market and this was just the kickoff. Very tough defensive team too, the bears that is. ;-)

[high density]

5. Tell me what date the bottom is

and I guess we'll both be rich. :)

[ozone_man]

8. I wish I knew.

I was never good at timing. But if I had to guess I'd say a few years from now. What will make this bear market so devastating is that the FED has been fighting it for the past five years, so now all the home equity loans have been spent, the consumer is tapped out. There are no more asset bubbles to shift the money to like housing during the 2001-2003 recession. All bubbles are must pop now. All imho.

[greyghost]

12. That's the real question isn't it? Is it recession or depression?

[bemildred]

15. The 1929 bear market went on for around 4-5 years.

This is a 10-year chart for the current DJIA:

http://bigcharts.marketwatch.com.nyud.net:8090/charts/big.chart?symb=djia&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&size=2&state=8&sid=1643&style=320&time=13&freq=2&nosettings=1&rand=1252&mocktick=1&rand=9169

We may be entering a depression, or something never seen before, but if that is so, we are not anywhere near the bottom. I don't think this is a depression, I think this is stagflation. If the markets are still tanking the end of January, I may change my mind.

[the other one]

30. Not above 7600 on the dow

At least 18 months away.

[Frustratedlady]

6. Is a fixed interest income account safe, or would I lose in that, too?

I pulled out of the mutual funds a couple years ago, which may or may not have been smart, but I wanted something more secure since Bush scared the beejeebers out of me. I'm sure I lost a lot of income when I didn't ride the market, but I couldn't take the chance. At least it is guaranteed not to go below what I put in...except that the dollar isn't worth burning.

How far down do you think it will go?

[ozone_man]

17. You should consult a professional.

Although message boards are fine for sharing opinions. :)

I think you did very well to get out early, especially if risk is not something you are in a position to take. You missed the top, but not many can say truthfully that they sold at the top. How far it goes down is anyone's guess, but I think it will eventually go well below 9,000. Maybe even 7,000. It could take a few years to get there. The trouble is that the FED interferes so much by devaluing the currency so what should have happened three or four years ago is just happening now. But it will be much worse as a result.

[high density]

21. "Professionals"

Watch out for salespeople disguised as financial advisers.

By the way, there are plenty of studies out there that show trying to time the market is a losing scenario. The future is anything but certain. The better idea is to set an asset allocation percentage to cash, bonds, and stocks that fits your need to take or tolerance for risk.

[Frustratedlady]

26. I stay with those I know and who have a long-standing reputation.

However, I feel we are into uncharted territory. We may know part of the journey, but not all of it. The first Depression didn't have all these countries involved, did it? We may have some screws tightened that we can't do anything about. JMVHO

Thanks for your input.

[ozone_man]

37. A professional who doesn't advise owning any stocks.

;)

[Frustratedlady]

24. Thanks for your advice.

I did talk to a professional and chickened out on taking any risk. I do put interest back in the market to get a little bit of bang for the buck, but will probably pull it back out, too. I of the age that I can't stand risk, physically or financially. If it were a different administration, I might still take a chance, but with this nut in the WH, I have no confidence.

[thunder rising]

14. If those companies are in business

It's a new world and part of this slump is the last gasp of the "old money" and "old thinking"

[high density]

19. So should we all put our money under our mattresses?

Buy gold? Yeah the economy sucks right now but unlike some DUers I do not think this is the end of the world as we know it.

[bemildred]

7. Russell 2000 Index Enters Bear Market for First Time Since 2002

Jan. 17 (Bloomberg) -- Small U.S. companies dropped, sending the Russell 2000 Index to its first bear market decline of 20 percent since 2002, after falling home construction and manufacturing reinforced expectations the economy will contract.

Raw-material producers and energy companies led the retreat after Federal Reserve Chairman Ben S. Bernanke's acknowledgment that output is weakening added to concern that earnings growth will slow. CF Industries Holdings Inc., which makes fertilizer, plunged the most since November. Petrohawk Energy Corp., an oil and gas producer, retreated for a third straight day.

``Anything that's leveraged to the economy is bad right now,'' said Dan Veru, who helps manage $3 billion as co-chief investment officer at Palisade Capital Management in Fort Lee, New Jersey. ``It's fear that's driving it, that these companies are going to miss their numbers and give terrible guidance.''

The Russell 2000, whose members have a median market value of $510 million, declined 2.8 percent to 680.57, more than 20 percent below its July 13 record. That meet's the common definition of a bear market, the first for the benchmark since October 2002. The Standard & Poor's SmallCap 600 lost 2.6 percent to 353.37. The S&P 500 declined 2.9 percent to a 15-month low of 1,333.25, bringing its retreat this year to 9.2 percent.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a3Nd6CT7FEWg&refer=news

[0007]

9. Anyone making money short selling these days?

[pa28]

23. I'm not sure what else to do.

Normally shorting makes me nervous but most of the stocks I like to watch have cracked long term support. Their chart patterns look like sick patients in the wrong room of a triage unit.

All kidding aside I'm really nervous about the aftermath here. A whole class of people who lost a chunk of their nest egg in the housing crunch and may be about to suffer another massive hit in their 401k's and long term stock investments.

:shrug:

[slipslidingaway]

32. Some Rydex bear funds n/t

[AlphaCentauri]

10. I'm starting to have a 401k headache n/t

[Warren Stupidity]

13. They will trumpet making the corrupt bush tax cuts permanent.

The only question is will our corrupted congressional leadership go along with it.

[mikeargo]

16. Just heard that shitbag Kudlow say

Markets are down because they're anticipating a Democratic victory in the fall.

[CatholicEdHead]

20. It's all poltics with Larry

That the market is never down and Republicans are always God.

[high density]

22. That was probably already priced into the market back in 2004

when W was selected again.

[StClone]

28. You knew they'd rationalize it that way!

What took them so long? Actually if the market is down again tomorrow it may be a good time to invest.

[natrat]

18. what a load of shit-the big trading houses decide to sell the mkt Jan 1

and they know about the data before it hits the news---it's a concerted joint effort to fleece people -same as it ever was

[kineneb]

25. continuing to invest in canned goods

about the only metal we can afford. Well, and lead...

have feathers, need tar

[Frustratedlady]

27. I've stocked up on canned goods, too. No joke!

I figured that was one area that could rise overnight with these insane gas prices. I pick them up when they are on sale. They'll store OK.

[Amonester]

29. Gee...The Wall Street crooks badly need (to steal) SS now...

That's all they've got left to rob...

[ProudDad]

31. Whoooooo Freakin' Hooooooo!!!

:woohoo: :woohoo: :woohoo: :woohoo: :woohoo: :woohoo: :woohoo:

What's "bad" for the market is GREAT for Working Folk!

[riverdale]

33. Not working folk who have Roth IRAs and 401Ks

I have no idea where to put my money these days.

[hairy-crab]

34. Stocks extend plunge; Dow falls 300

Greetings!

Its my first post here.

That said, US is in recession.

Which is bad news because if America REALLY falls into a recession, it will affect world economy.

Your comments/opinions on my POV will be appreciated.

[Lochloosa]

36. Welcome to DU hairy-crab

:toast:

[radfringe]

35. keep an eye on it around 11:50am et today -- piehole alert

smirk-boy opens his piehole and tells us how he's going to fix the economy the same way he fixed it before