Dow Industrials Sink Below the 10,000 Mark
Updated from 9:38 a.m. EDT
A wave of investor nausea sent U.S. stocks reeling Monday, as it became apparent that the credit crisis had spread beyond America into Europe and Asia.
The Dow Jones Industrial Average fell 380 points to 9945, breaking below 10,000 for the first time since October 2004. The S&P 500 gave back 50 points to 1049. The Nasdaq dropped 100 points to 1847.
In a sign of a global financial crunch, leaders from France, Germany, Italy and the U.K. met Saturday and agreed to coordinate efforts to prevent failures in Europe's financial system.A scramble ensued to help troubled institutions. Germany rescued lending company Hypo Real Estate, and France's BNP Paribas said it would take over Benelux bank Fortis NV. Germany's chancellor, Angela Merkel, announced that Germany would guarantee all of its private bank deposits. On Monday, Denmark followed suit. Back in the U.S., Wells Fargo (WFC) said it intended to go ahead with its purchase of Wachovia (WB). Wells Fargo said an appeals court vacated a ruling that extended an exclusivity agreement between Citigroup (C) and Wachovia. On Monday, analysts at both Keefe Bruyette and Friedman Billings upgraded Wells Fargo to market perform from underperform. Meanwhile, The Wall Street Journal said that Treasury Secretary Henry Paulson would appoint adviser Neel Kashkari to supervise the $700 billion bailout program for the financial system. Paulson's proposal passed the House of Representatives and was signed by President Bush on Friday. "What's different today is the bailout package came and went, and it's not going to solve the problem," said Bill Fleckenstein, hedge fund manager at Fleckenstein Capital Management. He said the selloff into the close Friday indicated that stocks are trending lower. "If we wind up having a crash the next couple days I wouldn't be surprised. That's what the tipoff from Friday was," he said.
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