Wall Street continued to dig the hole deeper, especially in the last hour of the session, as markets fell for another day. The Dow took a 2.63% hit and fell to 8,273.50 points for the day. The S&P 500 also fell, losing 2.58% and finishing the day at 850.75 points. The Nasdaq was not far behind losing 2.29% on the day, ending at 1,482 points. Markets seemed to be snowball selling in the final hour of trading after being positive for a short time earlier in the day; a pattern that has occurred more times than not in the past few months.
Congress is debating the rescue of Detroit’s automakers and where the aid will be coming from. Congressional republicans are pushing for the use of a $25 billion loan that was given to the industry for increased fuel efficiency. Democrats are asking for a portion of the already sought after $700 billion bailout money to go towards the automakers. One fact that is agreed upon by both sides is that a fix must come soon because the industry is close to a collapse.
In international news, Japan became the next victim of achieving the academic definition of recession. GDP for Japan retracted for the past 2 quarters by .4% and 3.7% respectively. The Nikkei 225 shrugged off that news closing slightly in the green by 0.7%.
Citigroup (C: 8.89, -0.63 (-6.62%)) said today that they will be making the 2nd largest cut in jobs by any company in history, handing out 53,000 pink slips. This initiative is combined with a plan to cut costs by 20% and sell off troubled assets. Citi’s employee base after the cuts will be approximately 300,000.
Alcoa (AA: 9.67, -1.17 (-10.79%)) fared terribly today after UBS (UBS: 11.70, +0.20 (+1.74%)) cut their recommendation to neutral from buy. Analysts blamed a rising dollar and lessening in demand for aluminum.
Gold fell to $742 on Monday, as crude also dipped to $55 on the NYMEX. The dollar also saw a slight decline against other major currencies.
- Hassan Chaudhry
Disclosure: None.
