Market Watch: Stocks tumble again and Treasurys surge


POSTED: Friday, November 21, 2008

NEW YORK » Stocks plunged for a second straight day yesterday, falling to levels not seen in at least five years, as financial and energy stocks tumbled while demand for the safety of government debt spiked.

Wall Street saw the most intense selling late in the session after hopes faded that lawmakers would quickly assemble an aid package for U.S. automakers, and as the Standard & Poor's 500 index broke through lows established in 2002.

The S&P 500 index fell 6.7 percent to its lowest close since April 1997. The Dow Jones industrial average, meanwhile, fell 445 points, or 5.6 percent, to its lowest close since March 2003. The decline brings the Dow's two-day drop to 873 points, or 10.6 percent, its worst two-day percentage loss since October 1987.

Those worries about the economy sent the Dow down 444.99, or 5.56 percent, to 7,552.29. It was the biggest percentage drop for the blue chips since Oct. 22 and the Dow's lowest close since March 12, 2003.

Broader stock indicators also showed huge declines. The Standard & Poor's 500 index fell 54.14, or 6.71 percent, to 752.44, below the closing low of 776.76 logged on Oct. 9, 2002, to its lowest close since April 14, 1997.

The Nasdaq composite index fell 70.30, or 5.07 percent, to 1,316.12.

The Russell 2000 index of smaller companies fell 27.07, or 6.56 percent, to 385.31.

Declining issues outnumbered advancers by more than 10 to 1 on the New York Stock Exchange, where consolidated volume came to 8.96 billion shares, the heaviest level since the 11.20 billion seen on Oct. 10.

The yield on the benchmark 10-year Treasury note sank to 3.00 percent, the lowest point since 1958. The 30-year bond's yield fell to 3.46 percent—the lowest since the government started issuing the bond in 1977. The yield on the 2-year note, meanwhile, fell to 0.97 percent—the lowest since 1947, according to Global Financial Data in Los Angeles.

Stocks rose briefly during the session on hopes that Washington would agree to help Detroit's Big Three. But Democratic leaders in Congress delayed a vote on bailing out the auto industry until December and are asking General Motors, Ford and Chrysler to present a plan to show how the $25 billion cash injection they have sought would be used.

Automakers advanced on hopes that a deal might eventually be reached. General Motors Corp. rose 9 cents, or 3.2 percent, to $2.88, while Ford Motor Co. rose 13 cents, or 10.3 percent, to $1.39. Chrysler LLC isn't publicly traded.

The Labor Department reported earlier yesterday that new applications for jobless benefits rose to a seasonally adjusted 542,000 last week from a downwardly revised figure of 515,000 in the previous week. That is well above economists' expectations of 505,000, according to a survey by Thomson Reuters.

Meanwhile, energy stocks fell sharply as oil tumbled $4 to settle at $49.62 on the New York Mercantile Exchange.

The dollar rose against most major currencies but fell against the yen, while gold rose.