All 10 groups in the Standard & Poor’s 500 Index fell at least 2 percent. Bank of America Corp. and Citigroup Inc. dropped 11 percent, pacing losses in financial shares, as the costs to protect the government debt of Greece, Italy, Spain and France rose. Walt Disney Co. (DIS), the largest theme-park company, tumbled 9.1 percent on concerns that the slowing economy and consumer confidence may hurt its businesses.
The S&P 500 fell 4.4 percent to 1,120.75 at 4 p.m. in New York. The benchmark gauge jumped 4.7 percent yesterday as the Federal Reserve said it would keep borrowing costs at an all-time low and was prepared to use a range of tools to bolster the economy. The Dow declined 520.29 points, or 4.6 percent, to 10,719.48.
“The message is that the market is concerned about the financial industry,” Kevin Caron, market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., said in a telephone interview. His firm has $115 billion in client assets. “The fact that Bank of America has said that they are comfortable with fundamentals is very positive. Still, the banks are exposed to a deteriorating economy. The European debt crisis has a whole set of issues. The concern is about a spillover effect of that.”
As you can guess, with Bank of America a dead man walking, the market is seriously expecting another financial windfall along the lines of TARP. Good luck getting that passed with the Tea Party making governing the country impossible.
The Dow down 18% in 13 trading days? Yeah, that's a bit of an issue. Fluctuations like this in the major markets indicates things are fundamentally broken at the most basic level right now. People keep saying how this isn't 2008 again, but brother, it sure feels like it.
I'm convinced the Fed will give us a TARP 2/QE 3 special, and do it soon.
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