Legal Commentary

Stock Market Loses $1 Trillion in Three Days

By Jeralyn

More bad news on the economic front. The Dow Jones dropped more than 410 points today.

The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent. The stock market has lost about $1 trillion over the past three days, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.

Among the reasons:

U.S. Treasury Secretary Henry Paulson said he was backing away from buying troubled mortgage assets and would focus on the capital needs of both banks and non-bank financial institutions.

[More...]

Another reason:

Paulson also announced a new goal for the program to support financial markets that supply consumer credit in such areas as credit card debt, auto loans and student loans. He said, "with a stronger capital base, our banks will be more confident" to support economic activity.

But investors are worried that a severe pullback in consumer spending — which drives more than two-thirds of the U.S. economy — will prolong a global economic downturn.

Full post as published by TalkLeft on November 12, 2008 (boomark / email).