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Wall Street tumbles amid global sell-off, oil below $90
(Agencies)
Updated: 2008-10-07 00:00 Broader indexes also tumbled. The Standard & Poor's 500 index shed 51.71, or 4.70 percent, to 1,047.52; and the Nasdaq composite index fell 95.83, or 4.92 percent, to 1,851.56. The Russell 2000 index of smaller companies dropped 28.78, or 4.65 percent, to 590.62.
The anxiety was again obvious in the credit markets. The yield on the three-month Treasury bill slipped to 0.38 percent from 0.50 percent late Friday. Demand for bills remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place. Investors also moved into longer-term Treasury bonds. The yield on the 10-year note fell to 3.52 percent from 3.60 percent late Friday. Banks' hesitation to lend to one another and to many businesses and individuals is the result of the bad mortgage debt that the financial rescue is supposed to sweep up. But it's still unclear how quickly financial institutions will be able to hand that debt to the US government and convince the markets they are healthy again. There has been some hope that perhaps the Fed, in concert with other central banks, might cut interest rates to help stimulate the economy. With oil prices well off their midsummer highs and indicators pointing to a slower economy, the Fed's worries about inflation are less than they had been, making it easier to justify a rate cut. Oil prices fell to an eight-month low below $90 a barrel on speculation that the spreading financial crisis will exacerbate a global economic slowdown and further cut demand for crude oil. Light, sweet crude tumbled $3.82 to $90.06 a barrel on the New York Mercantile Exchange. Investors might get some indication about a potential rate cut with several policymakers slated to speak this week. Dallas Fed President Richard Fisher and Chicago Fed President Charles Evans will speak on the US economy on Monday. Federal Reserve Chairman Ben Bernanke is due to speak on Tuesday. Frederick Dickson, chief market strategist at D.A. Davidson & Co., believes investors are eager for any signs about the well being of the economy. |
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