Bushonomics: US stocks swing sharply in early trading

Specialist Justin Bohan holds his head as he works at his post on the floor of the New York Stock Exchange, on 9 October 2008.

8 October 2008
By JOE BEL BRUNO

NEW YORK -Stock prices swung sharply in early trading Friday as investors again dumped stocks but also scooped up shares that have been devastated by more than a week of intense and panicked selling. The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to a loss of just over 125 and then headed lower again.

Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow to drop 21 percent in just 10 trading days. The blue chip index tumbled 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.

Friday's gyrations were likely caused the computer-driven "buy" orders that kicked in when prices had fallen far enough to make some stocks look like attractive bets. But that buying reflected no lifting of the market's deep despair, and selling continued.

"Momentum is running against the market and you don't want to get hit by a train," said Jack Ablin, chief investment officer at Harris Private Bank. "This is now about market psychology. There's extreme fear and panic out there."

At the start of Friday's session, losses for the year totaled a staggering $8.3 trillion, as 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.

A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and those that remained opened were hammered. The rout in Australian markets caused traders there to call it "Black Friday."

European stocks sank, with Britain's FTSE-100 down 8.09 percent, German's DAX down 9.4 percent, and France's CAC-40 down 9.7 percent. In Asia, the collapse of Japan's Yamato Life Insurance caused already nervous investors to pull even more money out of the market — the Nikkei 225 fell 9.6 percent.

The Dow fell 242 points to the 8,336 level. The Standard & Poor's 500 index was off 2.87 percent, while the Nasdaq composite index was down 1.16 percent.

Video: Will the stock market crash?

Commentary:
As to the question of the stock market crashing, the answer is yes and at anytime, as to the focus of where it stands in the current situation; for it has all the earmarks of an historical repeat of "Black Tuesday 1929. "

What is making some people to have extreme anxiety is not just the stock market coming extremely close to crashing or the current personal economic problems, it is felt it is the fact some economist have commented this coming economic depression will make the 1930’s Great Depression; seem like a sunny day walk in the park.