Stock Market Crash?

[Irish]

I just heard on the news that the stock market crashed. Depression II?

[Nix]

linky?

[Irish]

I heard it on CBS, on TV.

[lasttimearound]

isnt the market already closed?

[03CVLX]

I thought it closed being down only 100 point or so. But Im at work and could have easily missed something.

[Slow Joe]

It didn't crash according to CNN...


Vertigo on Wall Street
Volatile Dow plunges as much as 697 points, rises as much as 322, as panicky investors try to find their footing.

AMERICA'S MONEY CRISIS
Why the greenback is on a tear
House Dems plan second stimulus package
McCain: No mandatory retirement fund sales
The meltdown's silver lining - cheap oil
Banks may get accounting break

The Dow plunged nearly 700 points in the first five minutes of trading on Friday.

Quick Vote
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NEW YORK (CNNMoney.com) -- Stocks ended with slim declines Friday, as investors fought back from a decline of as much as 697 points on the Dow amid the global market meltdown.

Credit markets remained tight, although short-term lending showed some improvement from recent days. Treasury prices fell, raising the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil, gas and gold prices fell.

The Dow Jones industrial average (INDU) lost 50 points, or 0.6%, according to early tallies. It was the eighth down-day for both the Dow and the S&P.

The Standard & Poor's 500 (SPX) index was down 0.7% and the Nasdaq composite (COMP) ended just below unchanged. Both major gauges had tumbled with the Dow at the open.

Within the first five minutes of trade, the Dow had plunged 697 points, falling below 7,900 to its lowest level since March 17, 2003. The Nasdaq and S&P also hit more than five-year lows. But stocks recovered abruptly, with the Dow erasing losses. The afternoon saw the Dow make violent swings back and forth across the breakeven line, toppling as much as 600 points and rising 322 points.

Markets tanked Thursday, extending the Dow's losses over the last seven sessions to 2,271 points, or 20%, as panicked investors ditched stocks across the board.

That panic spread to global markets Friday, with the Japanese Nikkei tumbling 9.6% and the London FTSE down 8.9%. The global selloff kept the pressure on U.S. markets Friday.

"The magnitude of what's going on is unprecedented and people are frightened," said Robert Philips, senior portfolio strategist at BLB&B Advisors.

A key measure of investor fear hit an all-time high: The CBOE Volatility (VIX) index, or the VIX, hit 76 Friday afternoon before pulling back a bit.

Stocks have plunged despite a series of efforts on the part of the government to unfreeze the credit markets and get money flowing through the system again.

"Fear is feeding upon itself and nothing the officials have done to this point seems to stem the tide," said Ryan Atkinson, market analyst at Balestra Capital.

Earlier this week, the Fed announced an emergency rate cut, coordinated with banks around the world. The central bank has also pumped billions into the system.

"Central banks of the world have been flooding the markets with liquidity, but banks are hoarding cash," Atkinson said. "This is the lynchpin of the entire financial system and as long as this is still going on, the markets will be driven by fear."

On Friday, President Bush said that the government will continue to work to resolve the economic crisis to return stability to the markets. He is hosting a meeting with G7 Finance Ministers early Saturday morning, with a statement expected shortly after. (Full story)

Meanwhile, House Democrats are meeting Monday to discuss a potential second economic stimulus package, although House Republicans are reportedly skeptical of a second package, CNN reports.

Bear vs. Bull: Looking for a bottom

Stocks have been in a bear market for most of the year, but the selling began accelerating in September following a series of bank failures and mergers.

As of Friday morning, the three major stock gauges had fallen to within shouting distance of the March 2003 lows that turned out to be the bottom of the last bear market. Some market pros are wondering if that level could turn out to be the bottom for the 2008 bear market also. (Full story)

Since hitting all-time highs a year ago, the Dow has lost

However, bottoms are often "retested," meaning stocks fall to a low, bounce for a few days or even months, then fall back to right around that low, before making a bigger, more sustained advance off the low.

That's what happened in the last bear market. Stocks bottomed in early October of 2002, bounced a little bit in the lead up to the start of the Iraq war and then retested those lows in March of 2003.

Here's what was moving before 3:30 p.m. ET

Movers: Declines were broad based, with 25 out of 30 Dow stocks falling, led by oil services firms Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500), as crude prices continued their plunge amid worries of slowing demand.

Dow financial components JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) gained along with other financial services stocks as investors scooped up hard-hit issues.

Citi said late Thursday that it failed to reach a deal with Wachovia and that while it will seek damages, it won't block a Wachovia (WB, Fortune 500)-Wells Fargo (WFC, Fortune 500) merger.

But Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) tumbled on concerns that ratings agency Moody's might downgrade the two. (Full story)

General Electric (GE, Fortune 500) reported lower quarterly earnings Friday that met estimates on higher revenue that was just shy of estimates. The conglomerate, seen as a bellwether for the economy, due to the breadth of its businesses, also reaffirmed its 2008 forecast and said it is maintaining its dividend. (Full story).

Market breadth was decidedly negative. On the New York Stock Exchange, losers beat winners 15 to 1 on volume of 1.54 billion shares. On the Nasdaq, decliners topped advancers almost 6 to 1 on volume of 2.44 billion shares

Reaction to Fed action: The Federal reserve has taken several concrete steps in an effort to thaw out the frozen credit market.

Wednesday brought an emergency rate cut. On Thursday, the Treasury said it will soon buy stakes in some banks.

Earlier in the week, the Fed said it will buy short-term debt needed to finance daily operations directly from businesses. It also said it will make $300 billion available to banks in return for damaged assets, on top of $300 billion already available.

And Congress approved the $700 billion bank bailout plan last Friday, which allows the Treasury to buy bad debts from banks.

Yet, despite all these developments, credit markets have barely budged.

Credit markets frozen: Amid the ongoing crisis, lending has dried up, making it difficult for businesses to function on a daily basis and for consumers to get loans.

The TED spread, the difference between what banks pay to borrow from each other for three months and what the Treasury pays, spiked to an all-time high of 4.65% Friday before pulling back slightly.

The wider the spread, the more reluctant banks are to lend to each other, rather than from the federal government. When markets are fairly calm, banks charge each other premiums that are not much higher than the U.S. government.

Three-month Libor, or what banks charge each other to borrow for three months, rose to a 2008 high of 4.82% from 4.75% Thursday.

The yield on the 3-month Treasury bill, seen by many as the safest place to put money in the short term, fell to 0.25% from 0.5% Thursday, with panicked investors willing to take a piddling return on their money rather than risk stocks. Last month, the yield on the 3-month bill skidded to a 68-year low around 0%.

But one bank lending measure fared better.

Libor, the overnight bank lending rate, eased to 2.47% from 5.09% Thursday, according to Bloomberg.com. However, the levels were still high considering that Libor was at 2.15% a month ago. Still, it is an indication that banks were willing to take a chance on near-term lending.

Treasury prices slipped, raising the yields. The benchmark 10-year note rallied to 3.88% from 3.76% Thursday. Treasury prices and yields move in opposite directions.

Other markets: Oil prices plunged to a 13-month low Friday on bets that the slowing global economy will drag down oil demand.

U.S. light crude oil for November delivery fell $5.93 to $80.66 a barrel on the New York Mercantile Exchange. Prices slipped on continued bets that the slowing global economy will hurt demand.

Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11.

The price of gas decreased for the 23rd consecutive day, according to a survey of credit card activity by motorist group AAA.

COMEX gold for December delivery rose $14.50 to $901 an ounce.

In currency trading, the dollar gained against the euro and the yen.

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First Published: October 10, 2008: 11:10 AM ET

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50 years of profit swings

[CPonyGo]

down 128

[Irish]

I didn't see where it said it crashed. Damn American news BS!

[Firefighter Z]

Hmm what would happen in this day and age when the market does crash? (Shines shotgun)

[STANMAN]

When are people going to realize that America=the world. We are only as weak as we allow ourselves to be, everyone needs to understand that. And I am not even talking about the military. We feed 80% of the WORLD, is that hard to understand?? We are also the worlds cash cow, every foriegn government relies on the U.S. taxpayer as a 24/7 365 TYME machine, only the money is FREE!!!! If we stopped the cash and the food flow, the rest of the world would fall into chaos in a hurry, and the rest of the world knows it, even if most of the ignorant fucktards that live within it's own borders don't. What we should be worried about is why our leaders feel it's needed to fund the rest of the world and let the US die on the vine.

[tommyt5078]

Right on :headbang

[JC70SS]

No it didn't. It is called the price bubble on everything burst. Oil, houses, cars, clothes. People were paying way to much for everything especially houses starting in 03. Now things are going back to realistic prices. Good example is someone who would pay $1,000,000 for a Hemi Cuda 5 yrs ago. Just rediculous. What is the car REALLY worth?? $60k?

The problem is people watch too much of this shit on tv that "SCARES" people into panic mode. It is not that bad. Went for dinner tonight an hour wait! Must be a depression hey?

This is just like that Y2k scare tatic bullshit.

My last thought.....the stock market is like legalized gambling.....if you can't afford to lose it, don't gamble it.

[Adam Brooks]

technically it is a crash/crashing. we've had the biggest weekly/monthly/yearly percentage ever. I've seen some of the projections as to where we could end up based on technical analysis and models we use when trading, and its not looking good. However, no one knows for sure where things will end up.

Typically speaking:
Once markets literally drop like they've been doing, people wait for the bounce/run up before re entering. (if they only trade long and not short, I go both ways so the direction of the market doesn't affect how i trade. I do however have ENORMOUS concern for peoples retirement and savings. You, friends, family, America etc.. this is serious shit thats affecting everyone).

With everyone waiting for such an event to take place, it delays the rally/bounce from actually happening. The reason for this is that damn near everyone is waiting for someone else to do something first before they go back in. With everyone looking at everyone else to make the first move, it never happens.

Also "waterfall"/"knife" drops like this rarely rally back to where they were right away. Typically, there is a slow fade over numerous trading periods that extends the lows lower but by smaller percentages. There will be small up days in the mix with that but the trend will be clearly further downward.

Once this takes place, the movement usually goes sideways, meaning levels stay relatively flat, only fluctuating by a few percent positive or negative. Only then does the movement start to uptrend. Based on the global recession that is/will continue to be taking place, its going to take us a while (long time) to get back to where we were.

Points i briefly saw in this thread:
Panic selling - there is lot of it
America = world - thats absolutely true, which is why every foreign market is getting hit just as hard as we are relative to their size. some countries are actually way worse off than we are.

we are definitely seeing a historic time unfold in front of us. reasons for this are extremely numerous.

[Reverend Cooper]

ok everyone slap yourselves in the faces,pull up your skirts and realize if you keep working and spending your money the economy will return,if everyon stops normal day to day spending we will be fucked. to many scared biatches out there right now. let that shit go bankrupt,split the 700 billion up to taxpaying families and let the spending begine,wanna see the stock market go threw the roof. do it do it now