Deseret News | 'Slow-motion crash' — Stocks end mixed after record losses

'Slow-motion crash' — Stocks end mixed after record losses

By Tim Paradis
Associated Press

Published: Saturday, Oct. 11, 2008 12:00 a.m. MDT

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NEW YORK — Wall Street capped one of its worst weeks ever with a wild session Friday that saw the Dow Jones industrials rocket within a 1,000 point range before closing with a relatively mild loss and the Nasdaq composite index actually end with a modest advance. Investors were still agonizing over frozen credit markets, but seven days of massive losses made many stocks tempting for traders looking for bargains.

The Dow lost 128 points, giving the blue chips an eight-day loss of just under 2,400, or 22.1 percent. The average had its worst week on record in both point and percentage terms. The Standard & Poor's 500 index, the indicator most watched by market professionals, had its worst weekly run since 1933.

The latest loss also means the Dow is down more than 40 percent since reaching a record high close of 14,164.53 a year ago, on Oct. 9, 2007. The S&P 500, which reached its high of 1,565.15 the same day, is down 42.5 percent.

Investors suffered a paper loss for the day of about $100 billion, as measured by the Dow Jones Wilshire 5000 index. For the week, investors lost $2.4 trillion, and over the past year, the losses have piled up to $8.4 trillion.

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But there were signs Friday that some investors might believe the market was at or near a bottom. Just one day earlier, selling accelerated in the last hour of trading, giving the Dow a loss of 678 as many market players fled, while Friday, many people were clearly buying. And the Russell 2000 index, which tracks the movements of smaller company stocks, had a 4.66 percent gain Friday; small-cap stocks are often first on investors' shopping lists when they think a market turnaround is at hand.

It was even worse overseas. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell 7 percent and France's CAC-40 finished down 7.7 percent. Japan's benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened.

"Nobody wants to miss the bottom," said Anton Schutz, president of Mendon Capital Advisors in Rochester, N.Y., who said of the Dow's performance, "I view it as a victory that we only finished down 100."

Some investors may have been placing bets ahead of the weekend meeting of officials from the Group of Seven nations, who gathered in Washington to discuss the economic meltdown.

Treasury Secretary Henry Paulson announced late Friday that the government will buy an ownership stake in a broad array of American banks for the first time since the Great Depression.

Separately, the U.S. and other industrial powers pledged to take "decisive action and use all available tools" to prevent a worldwide economic catastrophe.

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'Slow-motion crash' — Stocks end mixed after record losses

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