Wednesday, August 15, 2007

Markets Pummeled

Seems like a full-scale panic going on in the markets now. The financial news wasn't that bad today, but the markets still tanked:

NEW YORK (Reuters) - U.S. stocks fell sharply on Wednesday, wiping out the year's gains for the benchmark S&P 500, after Countrywide Financial shares plunged on a brokerage downgrade and rumors it was having trouble raising money.


The Dow Jones industrial average lost 167.45 points, or 1.29 percent, to end at 12,861.47 -- or 8 percent below its record close. Wednesday marked the Dow's first close below 13,000 since April 24.

The Nasdaq Composite Index dropped 40.29 points, or 1.61 percent, to close at 2,458.83.

The Standard & Poor's 500 Index fell 19.84 points, or 1.39 percent, to finish at 1,406.70. The S&P is now 9.4 percent below its record high close less than a month ago and down 0.82 percent for the year.

And the S&P could fall further. According to the Dudack Research Group in New York technical indicators are not yet confirming a low in the S&P, with the next level for support for the index in the range of 1,400 to 1,380.

If any more hedge funds fail as a result of the subprime mortgage mess fall-out or news breaks of funds refusing redemption requests because of liquidity problems, you can bet the current panic on Wall Street will get worse.

And remember, with $170 billion more ARM's to reset this year and $400 billion to reset next year, many of the funds holding paper backed by mortgages have many more opportunities to go bust.

UPDATE: Asian markets took a beating on fears over subprime problems again today (every Asian market fell) and European markets are down sharply in early trading.

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