Stocks down 300 points! FUCK YOU BUSH!

Stocks Extend Plunge; Dow Falls 306

TIM PARADIS | January 17, 2008 06:14 PM EST |

YUP, THIS IS THE TRUTH ABOUT THE ECONOMY! UNLESS YOU THINK WALL STREET

ARE BUNCH OF LIBERALS! OF COURSE THEY'LL FIND A WAY TO BLAME LIBERALS

BUT AMERICA KNOWS WHO IS REALLY RESPONSIBLE! DON'TCHAKNOW ASSHOLE?

WEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Read More: Ben Bernanke, Dow Jones, Stock Market, U.S. Economy,

Breaking Business News

NEW YORK -- Wall Street extended its 2008 plunge Thursday, sending the

Dow Jones industrials down 306 points and to their lowest level since

last March after a regional Federal Reserve report showed a sharp and

unexpected decline in manufacturing activity. Downgrades of key bond

insurance companies added to the market's black mood, with investors

fearing an escalation of months of credit market problems.

The Dow lost nearly 2.5 percent, giving the index its worst three-day

percentage decline since October 2002. The Standard & Poor's 500, the

index closely watched by market professionals, fell nearly 3 percent

Thursday. The Dow, S&P 500 and the Nasdaq composite index have now

given back all of the gains they achieved in 2007.

Stocks opened higher but quickly gave up their gains after the

Philadelphia Federal Reserve said its survey of regional manufacturing

activity registered a negative 20.9 from a revised reading of negative

1.6 in December. The latest number came in well short of what Wall

Street had been expecting and underscored the seriousness of the

economic worries that have gripped both Wall Street and Washington in

recent weeks.

Credit concerns also dogged Wall Street after rating agency Moody's

Investors Service placed bond insurer Ambac Assurance Corp. on review

for a possible downgrade. That possibility alarmed investors because

it would place all bonds insured by Ambac on review as well. Wall

Street are concerned that bond insurers would be unable to absorb a

spike in claims.

Investors' fears of a slowing economy, the consequence of a months-

long housing and credit market crisis, dominated trading, as they have

since the start of the year.

"The Philadelphia Fed just announced dreadful numbers," said John

O'Donoghue, co-head of equities at Cowen & Co. He said if you look

back at Philadelphia Fed data for similar numbers, it takes you back

to the 2001 to 2002 recession.

"It's not rocket science _ the economy is slowing dramatically, and

it's being reflected in economic reports."

The Dow, which had been up more than 50 points early in the session,

closed down 306.95, or 2.46 percent, at 12,159.21.

The Dow is now off 8.33 percent for the year; there have been just 12

trading days so far in 2008, but the index's frequent triple-digit

losses have now forced it to give back its 2007 gains. The Dow had its

lowest close since it ended the March 16, 2007, session at 12,110.41.

The Dow's decline also left it about 150 points above 12,000, a level

it hasn't closed below since November 2006.

The broader market indicators also plummeted. The S&P 500 index lost

39.95, or 2.91 percent, closing at 1,333.25, and leaving it was a year-

to-date loss of 9.2 percent, while the Nasdaq dropped 47.69, or 1.99

percent, to 2,346.90, giving it a 2008 deficit of 11.51 percent.

Thursday brought the lowest close for the S&P 500 since October 2006

and the worst for the Nasdaq since March of last year.

Declining issues outnumbered advancers by more than 5 to 1 on the New

York Stock Exchange, where consolidated volume came to a heavy 5.41

billion shares compared with 5.25 billion traded Wednesday.

Bond prices rose as stocks fell and anxious investors sought the

safety of government-issued securities. The yield on the benchmark 10-

year Treasury note, which moves opposite its price, fell to 3.63

percent from 3.68 percent late Wednesday. The dollar was mixed against

other major currencies.

The Chicago Board Options Exchange's volatility index, known as the

VIX, and often referred to as the "fear index," jumped nearly 17

percent Thursday.

Light, sweet crude fell 71 cents to settle at $90.13 a barrel on the

New York Mercantile Exchange after Bernanke's prediction of slower

economic growth this year. Slowing growth could dampen demand for oil.

The Philadelphia manufacturing reading caught Wall Street by surprise

_ igniting fears that the economy is slowing precipitously and that

policymakers might be too late in contemplating aid.

Economists had expected the Philadelphia index would come in at a

negative 1.5, according to Dow Jones Newswires. Instead, the negative

20.9 figure was the weakest since October 2001 when the economy was

reeling from the shock of the Sept. 11 terror attacks.

Jim Herrick, manager of equity trading at Baird & Co., contends that

the Philadelphia Fed reading and other recent negative economic

reports indicate the economy is likely in a downturn.

Other economic reports added to investors' glum mood. The Commerce

Department said housing starts plunged 14 percent to 1.01 million in

December, marking the weakest pace of home building in more than 16

years. In addition, permits to build new homes dropped 8 percent last

month to 1.07 million, the lowest level since 1993.

The week's steady flow of news, much of which has dented investor

sentiment, has led to a growing chorus of calls for the Fed to cut

rates. The Fed's monetary policy committee will meet Jan. 29-30 and is

widely expected to lower its Fed funds target from the current 4.25

percent level. Bernanke on Thursday reiterated recent signals that the

central bank will reduce rates for a fourth straight time.

Some on Wall Street have called for the Fed to intervene sooner with

steep rate cuts.

The economic concerns come in a week in which some of Wall Street's

biggest names have posted huge losses following bad bets on mortgage

investments. Financial shares fell sharply Thursday after the reports

have made clear that there is also increasing weakness in home equity

and other consumer banking operations.

Merrill Lynch & Co. on Thursday posted a massive loss that underscored

the depth of the economy's credit problems. The world's largest

brokerage said it lost $9.91 billion in the fourth quarter, hurt by

big write-downs from investments and trades battered by tight credit

conditions.

John Thain, the new chief executive at Merrill, said he believes the

red ink will constitute the bulk of the company's write-downs from its

subprime mortgage exposure. But he would not speculate about what 2008

might hold in store in other areas. Earlier this week, Merrill secured

a new round of capital infusions from foreign funds.

Merrill fell $5.64, or 10 percent, to $49.45.

Moody's announcement that it will review Ambac came after the insurer

booked a $5.4 billion write-down on its credit derivative portfolio

during the fourth quarter.

Ambac plunged $6.73, or 52 percent, to $6.24, while Ambac rival MBIA

Inc. fell $4.18, or 31 percent, to $9.22. First Horizon National Corp.

fell $2.43, or 13 percent, to $16.48 after Standard & Poor's Ratings

Services lowered its rating on the bank's long-term credit.

The Russell 2000 index of smaller companies fell 19.34, or 2.76

percent, to 680.57.

Overseas, Japan's Nikkei stock average closed up 2.07 percent.

Britain's FTSE 100 finished down 0.68 percent, Germany's DAX index

fell 0.78 percent, and France's CAC-40 fell 1.31 percent.

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