Confidence Crisis in Stocks; Oil at $88

123jump.com Staff
06 Oct, 2008
New York City

The Dow Jones index dropped below 10,000 for the first time since October 2004. Nasdaq and S&P declined nearly 5%. Benchmark indexes in Russia, Brazil, Mexico and Indonesia plunged more than 10%. European markets closed down 5%. Metals and mining companies in New York dropped between 10% and 15%.

[R]12:10PM New York – Stocks in New York affirm the global trends of falling indexes as banking and credit crisis spread to Europe.[/R]

Stocks in New York plunged as the banking crisis spreads to Europe. In early trading, Dow Jones dropped at its lowest more than 5% and Nasdaq and S&P declined more than 6% and 5% respectively.

Dow Jones Industrial Average dropped below 10,000 for the first time in four years. Market index in Brazil plunged 15% and in Canada dropped 8% in the morning. Bovespa index in Brazil dropped 6,900 to 37,616.54 and Bolsa index in Mexico dived 1,596.70 or 7% to 21,392.80.

The Federal Reserve offered $150 billion in 85-day credit through Term Auction facility. The one hour auction that started at 11:00 a.m. ET attracted widespread interest with minimum bid of $5 million and maximum bid of $15 billion.

European markets closed sharply lower after Fortis was seized in Holland and its operations in Belgium and Luxembourg were sold to BNP Paribas. The French based bank agreed to pay $14.5 billion for its banking and insurance operations.

Euro dropped 1.7% against the dollar and traded near $1.3537 as credit market crisis spreads to Europe.

Emerging markets plunged around the world, with market index in Russia dived 19%, in Brazil plunged at its lowest 15%, in Saudi Arabia, Indonesia dropped 10% and in Turkey and Canada decline 7%. Markets in India and China drop more than 5%.

Mining and metals related stocks fell sharply in trading.

BHP Billiton ((BHP)) dropped $4.96 to $42.13, Freeport McMoran ((FCX)) plunged $3.06 to $41.78 and Peabody Energy ((BTU)) dived $3.43 to $32.69.

Arcelor Mittal ((MT)) plunged $6.54 to $38.17, U.S. Steel ((X)) sank $6.63 to $56.94 and Vale of Brazil ((RIO)) slid $2.66 to $13.10.