From Deseret News archives:
Stocks plunge and credit tightens
Investors appeared to be settling in for a prolonged economic winter. The main concern is that the $700 billion bailout plan won't be enough to stimulate growth, and economic reports delivered Thursday show that the U.S. continues to struggle.
The government said the number of people seeking unemployment benefits rose last week and that demand at the nation's factories has fallen by the largest amount in nearly two years. The market is interpreting the Commerce Department report on factories as a sign that tight credit conditions are hitting manufacturers.
"The economy is what's driving this weakness," said Subodh Kumar, global investment strategist at Toronto-based Subodh Kumar & Associates. "I think now what's going on is a focus on the economic weakness in a whole bunch of areas."
Supporters are hoping the sweetened bill will be more palatable to some of the 133 House Republicans who rejected the measure in a vote Monday that took Wall Street, and many on Capitol Hill, by surprise.
Those in favor of the plan to let the government buy billions of dollars in bad mortgage debt and other now-soured assets say it will help unclog the world's credit markets. Banks are fearful of making loans, even to each other, because of worries they won't be repaid. That, in turn, is weighing on the economy, making borrowing more difficult and expensive for businesses and consumers alike.
The credit markets showed some increased strain Thursday. The yield on the 3-month T-bill, the safest type of investment, fell to 0.70 percent from 0.79 percent late Wednesday. The historically low yields indicate investors are willing to accept the smallest of returns to safeguard their money.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.64 percent from 3.74 percent late Wednesday.
Comments
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- Senate to confront abortion in debate 9:10 a.m.
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- TCU to play Boise in Fiesta Bowl
- Utah/BYU rivalry can be more civil
- Utes excited to go to San Diego
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259 - Y. profs: Beck not all-knowing
231 - Hate not limited to 1 in-state rivalry
190 - Aggies shoot past Cougars
179 - TCU to play Boise in Fiesta Bowl
161 - N.Y. Senate rejects gay marriage
131 - George lost in rivalry hatefest
114 - Cougars going back to Vegas
102 - Ed Smart 'appalled' at testimony
98 - Harpring's NBA career is over
95
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