New York: Wall Street stocks plunged in the second biggest single day point loss in history and their worst percentage fall in two decades, ravaged by fears the world’s biggest economy is slipping into recession.
The Dow Jones Industrial Average slid 733.08 points (7.87%) to close at 8,577.91 on Wednesday in the worst one-day point loss since last month’s record 777-point decline and the steepest percentage drop since 1987.
In an even more brutal decline, the broad-market Standard & Poor’s index plunged 90.17 points (9.03%) to 907.84.
The tech-heavy Nasdaq sank 150.68 points (8.47%) to 1,628.33 in another violent session for stocks, despite massive rescue efforts for the ailing global banking sector.
“The stock market is buried by recession fears,” said Al Goldman at Wachovia Securities.
“Today’s culprit is the growing fear that the economic slump may turn into a more significant contraction as the credit squeeze of the past month begins to show up in the data,” analysts at Charles Schwab said in a market update note.
“Retail sales fell much more than expected, and a survey of manufacturing registered a steep drop. Economically sensitive companies are leading the broad-based rout.”
Federal Reserve chairman Ben Bernanke said a recovery from the financial crisis “will not happen right away” but the US economy would eventually emerge “with renewed vigour.”
“Stabilisation of the financial markets is a critical first step, but even if they stabilise as we hope they will, broader economic recovery will not happen right away,” Bernanke said.
Markets around the globe convulsed as the London FTSE 100 index of leading shares shed 7.16% while in Paris the CAC 40 fell 6.82% and the Frankfurt DAX gave up 6.49 %.