U.S. stocks thudded sharply lower on Wednesday to finish at more than five-years lows, with financial powerhouse Citigroup Inc. pummeled by its greatest ever one-day percentage drop falling 23.4% to end at $6.40, its largest one-session decline since the market collapse on Oct. 19, 1987, as fears intensified about its fate as well as the U.S. auto industry.
"It's a combination of comments from [Fed Chairman Ben] Bernanke and [Treasury Secretary Hank] Paulson that has us on pins and needles. Everything is hinging on what happens with the General Motors bailout," said Art Hogan, chief market strategist at Wall Street firm, Jefferies & Co.
After climbing in and out of positive and negative turf in the early going, the major stock indexes were down decisively in afternoon trades, with the losses intensifying in the final hour.
A day after the Big Three's CEOs went begging on Capitol Hill, there doesn't seem to be a whole lot of confidence that whatever measures taken to save the industry and its suppliers will be enough. Chrysler LLC returned to Capitol Hill for a second day to make their case for the government extending a bridge loan to their ailing industry. Stocks were under pressure much of the day after the biggest-ever drop in consumer prices and another gloomy housing report offered little cheer to investors already fretting about the fate of the Big Three automakers.
And, equities remained solidly lower after the release of the minutes from the last Federal Open Market Committee meeting, which had the central bank's policy-makers expecting the economic slump to last for as much as a year, if not longer.
Volume on the New York Stock Exchange topped 1.6 billion, and for every stock on the rise, more than 15 fell.
Just 13 months ago the Dow Jones Industrial average was at roughly 14,200, today it closed at 7,997 that is 45% lower in just a little over a year. Historically, dating back 60 years anyway, the Dow has returned 10% annually on your investment. Some financial stocks are at 50+ year lows. GM (General Motors)for example, an icon of american industry closed today at $2.79 a price not seen since 1942.
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