The Toronto stock exchange was down more than 300 points late Friday morning as markets around the world saw panicky investors engage in massive stock selloffs.
The main S&P/TSX composite index was down 364.44 points to 9,235.74, well off an earlier decline of almost 600 points.
The index was particularly hit hard by energy stocks, which have lost value as oil prices continue to retreat.
The November crude contract on the New York Mercantile Exchange pulled back $6.31 to US$80.28 a barrel Friday.
Meanwhile, New York's Dow Jones industrials were off 356.59 points to 8,222.6, following up on a 679-point retreat yesterday.
New York's Nasdaq composite index lost 55 points to 1,590.12 while the S&P 500 index lost 41.17 points to 868.75.
"Momentum is running against the market and you don't want to get hit by a train," Jack Ablin, chief investment officer at Harris Private Bank in New York, told The Associated Press.
"This is now about market psychology. There's extreme fear and panic out there."
Overseas, Asian and European markets slumped sharply on Friday as investors there also continued to sell hard.
London's FTSE 100 index slumped 5.24 per cent while the German DAX was down 6.9 per cent and the Paris CAC-40 fell 9.8 per cent.
In Japan, the benchmark Nikkei 225 index in Japan lost 881.06 points, or 9.6 per cent, to 8,276.43 -- the lowest closing level since May 2003.
Hong Kong's Hang Seng index fell more than 8 per cent while the Kospi index in South Korea lost 7.4 per cent. Shanghai's index fell 4.1 per cent and Singapore's Straits Times index lost 7 per cent.
In Australia, observers called the slump "Black Friday" after the key S&P/ASX200 dropped 8.34 per cent, or 360.2 points -- its sharpest one-day percentage loss ever.
The freefall was largely in response to the massive sell-off on Wall Street on Thursday and rising global economic uncertainty.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo told The Associated Press.
"Investors were gripped by fear."
Also Friday, Finance Minister Jim Flaherty announced that the government will buy $25 billion in mortgage-backed securities from Canadian banks in a bid to maintain the availability of credit.
With files from The Associated Press
Source: http://toronto.ctv.ca/servlet/an/local/CTVNews/20081010/dollar_markets_081010/20081010/?hub=TorontoNewHome
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Friday, October 10, 2008
Toronto stock exchange hit hard as energy stocks fall
Updated: Fri Oct. 10 2008 12:04:37 PM
CTV.ca News Staff
The Toronto stock exchange was down more than 300 points late Friday morning as markets around the world saw panicky investors engage in massive stock selloffs.
The main S&P/TSX composite index was down 364.44 points to 9,235.74, well off an earlier decline of almost 600 points.
The index was particularly hit hard by energy stocks, which have lost value as oil prices continue to retreat.
The November crude contract on the New York Mercantile Exchange pulled back $6.31 to US$80.28 a barrel Friday.
Meanwhile, New York's Dow Jones industrials were off 356.59 points to 8,222.6, following up on a 679-point retreat yesterday.
New York's Nasdaq composite index lost 55 points to 1,590.12 while the S&P 500 index lost 41.17 points to 868.75.
"Momentum is running against the market and you don't want to get hit by a train," Jack Ablin, chief investment officer at Harris Private Bank in New York, told The Associated Press.
"This is now about market psychology. There's extreme fear and panic out there."
Overseas, Asian and European markets slumped sharply on Friday as investors there also continued to sell hard.
London's FTSE 100 index slumped 5.24 per cent while the German DAX was down 6.9 per cent and the Paris CAC-40 fell 9.8 per cent.
In Japan, the benchmark Nikkei 225 index in Japan lost 881.06 points, or 9.6 per cent, to 8,276.43 -- the lowest closing level since May 2003.
Hong Kong's Hang Seng index fell more than 8 per cent while the Kospi index in South Korea lost 7.4 per cent. Shanghai's index fell 4.1 per cent and Singapore's Straits Times index lost 7 per cent.
In Australia, observers called the slump "Black Friday" after the key S&P/ASX200 dropped 8.34 per cent, or 360.2 points -- its sharpest one-day percentage loss ever.
The freefall was largely in response to the massive sell-off on Wall Street on Thursday and rising global economic uncertainty.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo told The Associated Press.
"Investors were gripped by fear."
Also Friday, Finance Minister Jim Flaherty announced that the government will buy $25 billion in mortgage-backed securities from Canadian banks in a bid to maintain the availability of credit.
With files from The Associated Press
Source: http://toronto.ctv.ca/servlet/an/local/CTVNews/20081010/dollar_markets_081010/20081010/?hub=TorontoNewHome
Brief rally fades after U.S. stocks plunge at open
By Jeffrey Stinson and Paul Wiseman, USA TODAY
A brief rally in U.S. stocks faded as fast as it appeared Friday, with major indexes heading lower again.
Stocks opened sharply lower, then turned on a dime, briefly erasing their losses, as traders at the New York Stock Exchange cheered. But the joy didn't last long.
The Dow Jones industrial average, already down 2,271 points in seven sessions, fell almost 700 points Friday before buying sent the index briefly into positive territory as traders at the New York Stock exchange cheered.
But the joy didn't last long. The major indexes fluctuated sharply as computer-driven "buy" orders kicked in, but investors sold heavily as markets around the world panicked because credit markets remain mostly frozen, still posing a threat to the global economy.
The selling had taken the Dow below the 8,000 level and the Standard & Poor's 500 index below 900.
FIND MORE STORIES IN: United States | Washington | George W. Bush | Europe | Japan | Russia | Britain | Wall Street | Asia | General Motors | Moscow | New York Stock Exchange | Ukraine | Singapore | Austria | Seoul | Romania | Nikkei | Prime Minister Gordon Brown | Iceland | Times of London | T-bills | Dow Jones Wilshire | Composite Index | Concerns | BGC Partners | Howard Wheeldon
Following the Dow's modest retracement, the FTSE was trading 282.94 points, or 6.6%, lower at 4,030.86 in afternoon trading London time, while the DAX was down 401.92 points, or 8.2%, at 4,485.08. France's CAC-40 was 284.43 points, or 8.3%, lower at 3,158.27.
ON DEADLINE: Recordings of Treasury conference call offer 'rare inside look,'
Trading on exchanges in Austria, Iceland, Romania and Ukraine was halted when losses mounted quickly. Russian regulators ordered Moscow exchanges, where trading has been suspended for two days, not to open as scheduled.
Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow Jones industrials to drop 21% in just 10 trading days. The blue chip index plunged 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.
Going into Friday's session, losses for the year add up to a staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in the U.S.
President Bush is scheduled to make a statement Friday morning about the financial turmoil. But, words are unlikely to stave off another brutal day, with futures pointing to another volatile session.
Investors continue to shift money into safer investments, most of it going into the government bond market. The yield on the three-month Treasury bill slipped to 0.50% from 0.58% late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.
Longer-term Treasury yields were also in favor. The yield on the benchmark 10-year note fell to 3.73% from 3.76% late Thursday.
Sell-offs in Europe followed huge plunges on exchanges in the United States and across Asia. Stock markets plunged from Seoul to Singapore, and then across Europe, after an overnight sell-off in New York. A key Japan index swan-dived 9.6%.
In Europe, although bank stocks were leading the freefall, shares in nearly every sector of the economy were being sold off.
Driving the plunge: Concerns that a global financial crisis that has frozen lending between banks has now seeped across all sectors signaling a worldwide recession.
"We're not talking about fears of recession — recession is here," said Howard Wheeldon, senior strategist at BGC Partners, a London brokerage house. "The question's now how deep, how protracted it's going to be."
The trigger, Wheeldon said, was word Thursday that the credit rating of General Motors (GM) could be cut.
That led a massive, 7.4% plunge on Wall Street's Dow Jones industrial average Thursday, with Asian and European investors quickly following suit as markets opened Friday.
"GM is a household name everywhere," Wheeldon said. "If GM is perceived to be in even worse trouble than it was, that's telling the markets this recession is going to be pretty awful."
Gloom from the markets here preceded a meeting by finance ministers and central bankers from the G-7 group of industrialized nations later today in Washington. They gather to try to address the global meltdown in the world's banking systems.
Many nations — including the United States, Britain and Russia — have jumped in in the last two weeks to bail out or prop up their major banks. Many nations haven't, however. And the efforts that have been taken haven't unfrozen lending between banks across the globe. Nor have they opened lending to industry and other businesses.
British Prime Minister Gordon Brown Friday called on other governments to follow Britain's lead and come to the rescue of their struggling banks. Britain this week offered banks a $848 billion bailout. That came on top of a $700 billion U.S. plan signed last week by Bush.
Writing in The Times of London, Brown called for "a global solution" to the financial crisis and said world leaders should gather to devise a plan to restructure financial markets."Because this is a global problem, it requires a global solution," he said.
Tokyo's benchmark Nikkei index plummeted more than 9.6% and finished the week down 24%, twice what it lost during the week of the October 1987 stock market crash. Hong Kong's Hang Seng index lost 7.2%, Seoul's Kospi index nearly 4%, Singapore's Straits Times index more than 8%.
"There's too much uncertainty in the market," said Sherman Chan, economist with Moodys Economy.com in Sydney, Australia. "Confidence is really weak."
The Asian markets took their lead from Wall Street, where to Dow Jones industrial average tumbled 7.3% Thursday to close below 9,000 for the first time in five years. The Dow has now dropped 2,271 points in the last seven trading days — worst 7-day performance ever.
"The U.S. and advanced economies' financial systems are now headed toward a near-term systemic financial meltdown...Day after day, stock markets are in free fall," New York University economist Nouriel Roubini wrote on his website. "We have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies."
Morgan Stanley on Friday cut its estimate for Japan's economic growth this year by half to 0.4% and predicted that the Japanese economy would contract by 1% in 2009.
Stocks are collapsing despite a coordinated effort by central banks around the world to cut interest rates this week and flood markets with liquidity. "People have been speculating for weeks about a coordinated rate cut," Moodys Chan said. "Finally it comes, but too late."
The good news, Chan says: The rate cuts show that central bankers are finally committed to jump-starting stalled economies, instead of tightening credit to fight inflation. But panicked investors are looking for bold movies from policymakers in Europe and the United States, where the crisis began with a meltdown in the U.S. housing market, she said.
"It all goes back to the U.S. and Europe," Chan said. "If they slow, the rest of Asia will suffer... More needs to be done to kick-start the recovery process. We expect more turbulence."
In Japan, Kenji Akasaka, 69, president of a printing company, said he had never seen it this bad in the 40 years he has traded stocks. He said he invests mainly in blue-chips including Toyota and Nintendo — both of which have lost about half their value over the last year.
"I pray before I go to bed that the Dow will recover," said Akasaka, 69, as he scanned a monitor displaying the latest market levels. "I get sleepless, thinking about losses."
Stinson reported from London, Wiseman reported from Hong Kong. Contributing: wire reports
Source: http://www.usatoday.com/money/markets/2008-10-10-stocks-friday_N.htm
A brief rally in U.S. stocks faded as fast as it appeared Friday, with major indexes heading lower again.
Stocks opened sharply lower, then turned on a dime, briefly erasing their losses, as traders at the New York Stock Exchange cheered. But the joy didn't last long.
The Dow Jones industrial average, already down 2,271 points in seven sessions, fell almost 700 points Friday before buying sent the index briefly into positive territory as traders at the New York Stock exchange cheered.
But the joy didn't last long. The major indexes fluctuated sharply as computer-driven "buy" orders kicked in, but investors sold heavily as markets around the world panicked because credit markets remain mostly frozen, still posing a threat to the global economy.
The selling had taken the Dow below the 8,000 level and the Standard & Poor's 500 index below 900.
FIND MORE STORIES IN: United States | Washington | George W. Bush | Europe | Japan | Russia | Britain | Wall Street | Asia | General Motors | Moscow | New York Stock Exchange | Ukraine | Singapore | Austria | Seoul | Romania | Nikkei | Prime Minister Gordon Brown | Iceland | Times of London | T-bills | Dow Jones Wilshire | Composite Index | Concerns | BGC Partners | Howard Wheeldon
Following the Dow's modest retracement, the FTSE was trading 282.94 points, or 6.6%, lower at 4,030.86 in afternoon trading London time, while the DAX was down 401.92 points, or 8.2%, at 4,485.08. France's CAC-40 was 284.43 points, or 8.3%, lower at 3,158.27.
ON DEADLINE: Recordings of Treasury conference call offer 'rare inside look,'
Trading on exchanges in Austria, Iceland, Romania and Ukraine was halted when losses mounted quickly. Russian regulators ordered Moscow exchanges, where trading has been suspended for two days, not to open as scheduled.
Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow Jones industrials to drop 21% in just 10 trading days. The blue chip index plunged 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.
Going into Friday's session, losses for the year add up to a staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in the U.S.
President Bush is scheduled to make a statement Friday morning about the financial turmoil. But, words are unlikely to stave off another brutal day, with futures pointing to another volatile session.
Investors continue to shift money into safer investments, most of it going into the government bond market. The yield on the three-month Treasury bill slipped to 0.50% from 0.58% late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.
Longer-term Treasury yields were also in favor. The yield on the benchmark 10-year note fell to 3.73% from 3.76% late Thursday.
Sell-offs in Europe followed huge plunges on exchanges in the United States and across Asia. Stock markets plunged from Seoul to Singapore, and then across Europe, after an overnight sell-off in New York. A key Japan index swan-dived 9.6%.
In Europe, although bank stocks were leading the freefall, shares in nearly every sector of the economy were being sold off.
Driving the plunge: Concerns that a global financial crisis that has frozen lending between banks has now seeped across all sectors signaling a worldwide recession.
"We're not talking about fears of recession — recession is here," said Howard Wheeldon, senior strategist at BGC Partners, a London brokerage house. "The question's now how deep, how protracted it's going to be."
The trigger, Wheeldon said, was word Thursday that the credit rating of General Motors (GM) could be cut.
That led a massive, 7.4% plunge on Wall Street's Dow Jones industrial average Thursday, with Asian and European investors quickly following suit as markets opened Friday.
"GM is a household name everywhere," Wheeldon said. "If GM is perceived to be in even worse trouble than it was, that's telling the markets this recession is going to be pretty awful."
Gloom from the markets here preceded a meeting by finance ministers and central bankers from the G-7 group of industrialized nations later today in Washington. They gather to try to address the global meltdown in the world's banking systems.
Many nations — including the United States, Britain and Russia — have jumped in in the last two weeks to bail out or prop up their major banks. Many nations haven't, however. And the efforts that have been taken haven't unfrozen lending between banks across the globe. Nor have they opened lending to industry and other businesses.
British Prime Minister Gordon Brown Friday called on other governments to follow Britain's lead and come to the rescue of their struggling banks. Britain this week offered banks a $848 billion bailout. That came on top of a $700 billion U.S. plan signed last week by Bush.
Writing in The Times of London, Brown called for "a global solution" to the financial crisis and said world leaders should gather to devise a plan to restructure financial markets."Because this is a global problem, it requires a global solution," he said.
Tokyo's benchmark Nikkei index plummeted more than 9.6% and finished the week down 24%, twice what it lost during the week of the October 1987 stock market crash. Hong Kong's Hang Seng index lost 7.2%, Seoul's Kospi index nearly 4%, Singapore's Straits Times index more than 8%.
"There's too much uncertainty in the market," said Sherman Chan, economist with Moodys Economy.com in Sydney, Australia. "Confidence is really weak."
The Asian markets took their lead from Wall Street, where to Dow Jones industrial average tumbled 7.3% Thursday to close below 9,000 for the first time in five years. The Dow has now dropped 2,271 points in the last seven trading days — worst 7-day performance ever.
"The U.S. and advanced economies' financial systems are now headed toward a near-term systemic financial meltdown...Day after day, stock markets are in free fall," New York University economist Nouriel Roubini wrote on his website. "We have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies."
Morgan Stanley on Friday cut its estimate for Japan's economic growth this year by half to 0.4% and predicted that the Japanese economy would contract by 1% in 2009.
Stocks are collapsing despite a coordinated effort by central banks around the world to cut interest rates this week and flood markets with liquidity. "People have been speculating for weeks about a coordinated rate cut," Moodys Chan said. "Finally it comes, but too late."
The good news, Chan says: The rate cuts show that central bankers are finally committed to jump-starting stalled economies, instead of tightening credit to fight inflation. But panicked investors are looking for bold movies from policymakers in Europe and the United States, where the crisis began with a meltdown in the U.S. housing market, she said.
"It all goes back to the U.S. and Europe," Chan said. "If they slow, the rest of Asia will suffer... More needs to be done to kick-start the recovery process. We expect more turbulence."
In Japan, Kenji Akasaka, 69, president of a printing company, said he had never seen it this bad in the 40 years he has traded stocks. He said he invests mainly in blue-chips including Toyota and Nintendo — both of which have lost about half their value over the last year.
"I pray before I go to bed that the Dow will recover," said Akasaka, 69, as he scanned a monitor displaying the latest market levels. "I get sleepless, thinking about losses."
Stinson reported from London, Wiseman reported from Hong Kong. Contributing: wire reports
Source: http://www.usatoday.com/money/markets/2008-10-10-stocks-friday_N.htm
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