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jueves, febrero 19, 2009

The Dow Grovels

The Dow Jones Industrial Average, 2/19/09 Close

Oh boy. This is ugly.
The Dow lost 89.68 points or 1.2 percent to end the day at 7,465.95, dropping below the recent lows it set on Nov. 20, when the broader markets tumbled to their lowest levels in a decade. The Dow last closed below 7,500 during the recession following the Internet bubble, sinking to 7,286 on Oct. 9, 2002.

The broader Standard & Poor’s 500-stock index finished 9.48 points or 1.2 percent lower at 778.94. The S.&P. 500 has fallen below 800 in recent days — which analysts consider an important psychological threshold — but it has not retested its late November lows near 750.

The technology-heavy Nasdaq index was 1.5 percent lower, weighed down by losses at computer companies including Dell and Sun Microsystems.

Today was the first time the Dow closed below 7500 since 2002. Put another way, the Dow has given back seven years' growth and is worth just about half of what it was at its peak last year.

This is ugliness. And the prognosticators are implying that things will get even worse:
While stocks have been trading in a broad range over the last three months, analysts said that the indexes may be carving out a new, deeper trench, where the bottom of the old range becomes the top of the new one. Stocks could linger there for the next few months, analysts said, as Washington tries to resuscitate the shaky financial system and slow the pace of economic declines.
Putting money under the mattress was apparently quite a viable strategy for the past six or seven years. Or low interest savings accounts. Everything else seems to have been a total bust.

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