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U.S. Stocks Plunge, S&P 500 Heads for Worst Month Since 1938
October 25, 2008
U.S. stocks tumbled this week, driving the Standard & Poor’s 500 Index toward the steepest monthly loss since 1938, on concern the global economy is sliding into a recession.
Alcoa Inc., Citigroup Inc. and Hewlett-Packard Co. retreated the most in the Dow Jones Industrial Average, losing more than 18 percent, as investors bet the financial crisis spread beyond banks to industrial companies and computer makers. General Motors Corp. approached the lowest price since the 1950s, and Ford Motor Co. plunged 17 percent.
“There are forced sellers and no one willing to stick their neck out,” said Henry Herrmann, Overland Park, Kansas-based president of Waddell & Reed Financial Inc., which manages $70 billion.
The S&P 500 retreated 6.8 percent to 876.77, the lowest level since April 2003. The benchmark index for U.S. equities plunged 25 percent in October. The Dow average fell 5.4 percent to 8,378.95 this week. The MSCI World Index of 23 developed markets lost 8.3 percent, while Brazil, Russia and India drove a gauge of 25 emerging markets to a 17 percent slump.
More than $10 trillion has been erased from the market value of shares worldwide this month as earnings decrease. The 236 companies in the S&P 500 that have reported third-quarter results posted a 23 percent decline on average. Reports yesterday showed the U.K. economy contracted for the first time since 1992 and growth in South Korea was the slowest in four years.
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