Stocks Battered as Financial Crisis Spreads to Europe
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Stock markets plunged around the world Monday as the financial crisis that began in the U.S. spread to European banks, but U.S. stocks managed to cut their losses in half by the close on hopes that Europe can mount a coordinated response to the crisis.
The sell-off came as the U.S. moved quickly to begin implementing the massive financial bailout plan passed on Friday, even as officials stressed it will take time for the plan's effect to be felt.
The Nasdaq lost 4.3%, or 84 points, to 1863, its lowest level in four years even though it managed to end the day 86 points off its lowest point. The Dow and S&P 500 also finished well off their lows, but the Dow had its first close below 10,000 in four years and the S&P ended the day near a five-year low. More than half of NYSE stocks made 52-week lows for the first time since the 1987 crash and for only the second time since 1970.
Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL) led the decline, with losses of more than 5% each, while Apple (NASDAQ: AAPL) managed to claw its way back to a 1% gain.
SAP (NYSE: SAP) and Netflix (NASDAQ: NFLX) fell after lowering their outlooks because of growing economic weakness and the worsening credit crunch. The third-quarter earnings reporting period will begin in earnest next week, and tech investors will be watching carefully to see what effect the credit crisis that accelerated last month is having on tech spending.
eBay (NASDAQ: EBAY) fell 5.5% on news of layoffs and an acquisition.
Nvidia (NASDAQ: NVDA) fell 13% on a Pacific Crest downgrade.
Wavecom (NASDAQ: WVCM) soared 55% on a buyout offer.
The Nasdaq lost 84 to 1862, the S&P fell 42 to 1056, and the Dow tumbled 369 to 9955. Volume rose to 7.89 billion shares on the NYSE, and 3.5 billion on the Nasdaq. Decliners led by a 30-2 margin on the NYSE, and 25-4 on the Nasdaq. Downside volume was 93% on the NYSE, and 89% on the Nasdaq. New highs-new lows were 2-1663 on the NYSE, and 8-1141 on the Nasdaq.