Bears Roar Into Finish; Dow Closes Below 8000
Updated from 4:08 p.m. EST
Stuck in losing territory for much of Wednesday's trading, U.S. stocks took a late-day plunge to settle with massive losses, as record-setting declines in housing and consumer prices wreaked havoc on the major averages.
The Dow Jones Industrial Average sank 427.47 points, or 5.1%, to 7997.28, and the S&P 500 fell 52.54 points, or 6.1%, to 806.58. The Nasdaq tumbled 96.85 points, or 6.5%, to 1386.42. All 30 of the Dow's component stocks finished with losses as the index closed below the 8000 mark for the first time in more than five years.
Investors sold furiously, showing little faith in U.S. companies' ability to weather a worsening economic climate. Several data releases gave credence to traders' trepidation. The Census Bureau said that housing starts declined 4.5% to an annual rate of 791,000 for October, the largest one-month decline on government records dating back to 1959."Lowest of all time kind of speaks for itself," said Mike Feroli, U.S. economist for JPMorgan Economics. "If you're looking for a silver lining, the pain now hopefully puts you in a place to clear out inventories down the line." But in exchange for cleared inventories, the U.S. will suffer declines in construction employment and slower growth, he said.
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