Wednesday, January 21, 2009

Market Responds

Ouch.

U.S. stocks sank, sending the Dow Jones Industrial Average to its worst Inauguration Day decline, as speculation banks must raise more capital sent financial shares to an almost 14-year low.

State Street Corp., the largest money manager for institutions, tumbled 59 percent after unrealized bond losses almost doubled. Wells Fargo & Co. and Bank of America Corp. slumped more than 23 percent on an analyst’s prediction that they’ll need to take steps to shore up their balance sheets. The Dow’s 4 percent slide was the most on an Inauguration Day in the measure’s 112-year history, according to data compiled by Bloomberg and the Stock Trader’s Almanac.

“All the banks are going to have to recapitalize,” said Greg Woodard, portfolio strategist at Manning & Napier Advisors Inc., which manages $16 billion in Fairport, New York. “That’s not done. That’s in front of them, and we don’t want to try to get in front of that trade.”

The S&P 500 plunged 5.3 percent to 805.22. The S&P 500 Financials Index fell 17 percent to below its lowest closing level since March 1995 as concern European banks need more capital also weighed on the group. The Dow average slid 332.13 points to 7,949.09. Both the Dow and S&P 500 retreated to two- month lows.

(10) Comments
Posted by Owen at 0116 hrs
Economy + Politics + Politics - General

  1. “Market responds” to what?  The implication (this being a conservative political blog and all) seems that the market fell Tuesday because Obama took the reins.  Yet the quoted bits here suggest no such thing.

    It would help if your comments were less ambiguous.

    Posted by folkbum on January 21, 2009 at 0650 hrs


  2. Well - with all the new taxes coming out if not this year than next, I would say the market is adjusting to an expectation of lower profits.

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 0813 hrs


  3. It’s also reacting to speculation that bank shareholders are about to lose out because banks won’t get free money to take worthless crap off their hands.

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 0815 hrs


  4. Invest in any stock related to water; the price is going to soar now that we know Obama can walk on it.

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 0909 hrs


  5. I am not sure how much more statistically viable you can get. Inference is one thing but the fact is that this was the worst drop on this day in history. Just like when the weather man says that on this day the average is this and the high and low are this and we sit here, this is a statement saying that on no other inauguration day did the market tank as much as it did on this one. Now coincidently, it also tanked when he was elected and when he was nominated but these are just that coincidences.

    Posted by fishaddict on January 21, 2009 at 1113 hrs


  6. Now coincidently, it also tanked when he was elected and when he was nominated but these are just that coincidences.

    Hmmm…

    Stocks rally globally as Americans vote


    And I am sure there is no correlation w/this

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 1213 hrs


  7. Obama was elected in November. You’re saying investors waited until the day of his inauguration to dump their stocks?

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 1448 hrs


  8. And the market was up 400+ today.  What does that mean?

    Posted by folkbum on January 21, 2009 at 1824 hrs


  9. Actually NYTexan, investors believed that Obama wouldn’t actually take office due to his illegitimate citizenship. But when Inauguration Day arrived, they finally gave it up and started selling. wink

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 1845 hrs


  10. And the market was up 400+ today.  What does that mean?

    The best “1st day of a new Presidential administration” uptick in the measure’s 112 year history?

    Note - I think the Dow was up 279, but the point is the same.  Also, I haven’t confirmed that this is actually the largest post-Inauguration Day increase, either.

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2009 at 1934 hrs


Commenting is not available in this channel entry.