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Market Closes Below 8000 on Banking Fears

Updated from 4:10 p.m. EST

Stock prices deteriorated Tuesday, with financials leading the Dow Jones Industrial Average to a close below 8000 as Barack Obama was sworn in as president of the United States.

The Dow gave up 332.12 points, or 4%, to 7949.09, and the S&P 500 lost 44.90 points, or 5.3%, to 805.22. The Nasdaq found no shelter, losing 88.47, or 5.8%, to end the day at 1440.86.

While the market typically lags on the day of or nearest to an inauguration, Tuesday underwhelmed even Nov. 22, 1963, when Lyndon B. Johnson replaced the assassinated John F. Kennedy and the DJIA retracted 2.9%, noted The Wall Street Journal's MarketBeat. The drop made for the worst inauguration day in the Dow's history.

President Obama is taking the helm during one of the most severe economic downturns in the nation's history. "Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age," he said among his remarks in his inaugural address.

The 44th president and first African-American to take the office offered not only a critical and candid view of state of the nation, but also, as was the theme of his campaign, hope. "Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America -- they will be met."

Of course, Obama's speech sets the tone for what he's hoping to accomplish in not just the next hundred days but the next few years, noted Paul Nolte, Director of Investments for Hinsdale Associates. "But I don't think the markets are paying attention," he said, adding that they are focused on financials, which won't be fixed in the near term.

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