http://biz.yahoo.com/ap/081006/wall_street.html
AP
Wall Street tumbles amid global sell-off
Monday October 6, 11:29 am ET
By Joe Bel Bruno, AP Business Writer
Stocks decline amid global worries credit crisis is spreading; Dow falls below 10,000NEW YORK (AP)—Wall Street tumbled again Monday, joining a sell-off around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The Dow Jones industrials skidded nearly 500 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.
The markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash. That’s caused investors to exit stocks and move money into the relative safety of government debt.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France’s BNP Paribas agreed to acquire a 75 percent stake in Fortis’s Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks’ reserves and will expand its loan program to squeezed banks.
Investors took a bleak view of the future, seeing no end to the crisis in the near term.
“This is a psychologically important moment that we passed below the 10,000 level,“ said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “But, the issues are worldwide. The fact is people are scared and the only thing they’re doing is selling.“
