U.S. Stocks Tumble

U.S. stocks fell, sending the Standard & Poor's 500 Index below 1,000 for the first time since 2003, on speculation banks and real-estate companies are running short of money as the credit crisis worsens.

Bank of America Corp. tumbled 26 percent after cutting its dividend in half and saying it plans to sell $10 billion in common stock to brace for a recession. Morgan Stanley, KeyCorp and JPMorgan Chase & Co. slid at least 10 percent as investors shrugged off signs the Federal Reserve will cut interest rates. General Growth Properties Inc., a Chicago-based mall owner, plunged 42 percent on concern it won't be able to repay debt.

The Standard & Poor's 500 Index slid 60.64 points, or 5.7 percent, to 996.25. The Dow Jones Industrial Average dropped 508.39, or 5.1 percent, to 9,447.11. The Nasdaq Composite Index lost 4.3 percent to 1,862.96. Fourteen stocks fell for each that rose on the New York Stock Exchange.

The S&P 500 extended its 2008 decline to 32 percent, while the Dow's yearly loss widened to 29 percent in the market's worst yearly retreat since 1937. The S&P 500 Financials Index slumped 12 percent to below its lowest level since 1997 even after Fed Chairman Ben S. Bernanke signaled he is ready to cut interest rates.

Canadian stocks fell a fifth day, sending the main index toward its lowest in more than three years, as financial and energy companies slid on concern that profits will be hurt by the credit crunch and lower oil prices. The Standard & Poor's/TSX Composite Index slid 3.4 percent to 9,886.08 at 3:33 p.m. in Toronto, the lowest intraday level since June 2005.

Brazilian stocks fell for a fourth day, led by retailers and industrial stocks, on concern a deepening recession and widening credit crisis may hurt consumer spending and lower the outlook for earnings. The Bovespa index slid 1,960.96, or 4.6 percent, to 40,139.85.

European stocks swung wildy in volatile trade on Tuesday as fears that banks need additional funding sent financial stocks tumbling. Germany’s Xetra Dax added 0.5 per cent to 5,415.42 and in France the CAC 40 outperformed the wider market rising 1.9 per cent to 3,782.64. In London, the FTSE 100 gained 1.3 per cent to 4,647.6.

Russian stocks fell, extending yesterday's record drop, as a plan by President Dmitry Medvedev to lend $36 billion to banks wasn't enough to convince investors the government can halt its worst financial crisis since 1998. The Micex Index fell 4.5 percent to 717.83, after losing 19 percent yesterday to the lowest since August 2005.

Asian shares pared declines on Tuesday after Australia's central bank reduced interest rates by the most since 1992.

Japan's stocks slumped, sending the Nikkei 225 Stock Average to its lowest close in almost five years, as the seizure in credit markets curbed demand for the nation's exports and threatened to worsen the economic slowdown. The Nikkei Average fell 317.19, or 3 percent, to close at 10,155.90 in Tokyo after dipping below 10,000 for the first time since Dec. 10, 2003.

Australian stocks rallied and bonds jumped after the nation's central bank cut benchmark interest rates by one percentage point, the biggest reduction since 1992. The S&P/ASX 200 Index added 1.7 percent to 4,618.70 at the close in Sydney, reversing an earlier loss of 0.5 percent immediately before the decision. The index has lost almost a third of its value this year amid a credit freeze triggered by the U.S. subprime mortgage crisis.

Indian stocks fell, with the benchmark Sensitive Index holding at a 2-year low on concern surging credit costs will deepen a global slowdown. The Bombay Stock Exchange's Sensitive Index, or Sensex, slid 0.9 percent to 11,695.24. The index held at its lowest since Sept. 12, 2006.

China's stocks fell for a second day, led by raw-material and energy companies, extending a global rout after commodity prices slumped and Aluminum Corp. of China Ltd. forecast a profit decline. The CSI 300 Index, which tracks yu...

TradingEconomics.com, Bloomberg
10/7/2008 1:31:03 PM