Street drop extends; fed report is grim
Wall Street extended its 2008 plunge Thursday, sending the Dow Jones industrials down 306 points and to their lowest level since March after a regional Federal Reserve report showed a sharp and unexpected decline in manufacturing activity. Downgrades of key bond insurance companies added to the market's black mood, with investors fearing an escalation of months of credit market problems. The Dow lost nearly 2.5 percent, giving the index its worst three-day percentage decline since October 2002. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3 percent Thursday. The Dow, S&P 500 and the Nasdaq composite index have now given back all of the gains they achieved in 2007.
Merrill Lynch news
John Thain, presiding over his first set of earnings Thursday as the leader of Merrill Lynch & Co., cleared the decks with about $15 billion of subprime mortgage related write-downs that led to the largest quarterly loss since the brokerage was founded 94 years ago. And, while it was among the most aggressive moves on Wall Street to deal with bad bets on subprime mortgages, Thain's still not ready to say the worst of the credit crisis is over.
Exchange buys rival
The New York Stock Exchange on Thursday agreed to buy the American Stock Exchange, ending a once intense rivalry that began in colonial times when brokers traded in outdoor markets. Newspapers around the country all listed the stock swings on the nation's two dominant markets, until investors began paying more attention in the 1990s to technology issues on the upstart Nasdaq Stock Market.
WaMu's $1.87B loss
Washington Mutual Inc., the country's biggest savings and loan, said Thursday it swung to a $1.87 billion loss in the fourth quarter, hurt badly by the sinking value of its mortgage portfolio. The quarterly loss was $2.19 per share, compared with a profit of $1.06 billion, or $1.10 per share in the same period last year. Results included a write-down of $1.6 billion as the value of home loans withered, which WaMu had disclosed previously.
Most drivers dread the prospect of paying $4 a gallon for regular gasoline -- which some experts say could happen this summer.