The sentiment remains weak amid apprehensions that government efforts to combat the recession won`t be sufficient. US President signs stimulus bill into law US stocks tumbled on Tuesday, extending the current bad run in global equities amid mounting concerns that the worldwide recession is spiraling out of control. The S&P 500 Index fell below 800 for the first time in nearly three months.

The sentiment remained weak amid apprehensions that the Obama administration’s efforts to combat the recession won’t be sufficient even as the US President signed the US$787bn economic stimulus bill into law.

The Dow Jones Industrial Average slid nearly 298 points, or 3.8%, to 7,552.6, ending just above the bear market closing low of 7,552.29 struck on Nov. 20. All but one of the blue-chip index’s 30 components – Wal-Mart Stores – posted losses. The Dow fell as low as 7,551.01, above its Nov. 20 intraday low of 7,464.51.

The S&P 500 index plunged 37.67 points, or 4.6%, to finish at 789.17, just above its 752.44 close on Nov. 20, when it ended at its lowest level since November of 2002. The Nasdaq Composite Index shed 63.7 points, or 4.2%, to 1,470.66.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers by more than 14 to 1 on volume of 1.6bn shares. On the Nasdaq, losers topped winners by almost 6 to 1 on volume of 2.4bn shares.

Wall Street retreated last week and resumed the sell-off on Tuesday. All financial markets were closed Monday for Presidents Day.

US investors were also concerned about the automakers as Chrysler and GM were scheduled to announce their plans for becoming viable after receiving US$17.4bn in government aid.

After the market close, Chrysler said it will need at least US$5bn more to turn the company around, and that it will cut 3,000 jobs. GM said it needs an additional US$9.1bn and that if economic conditions deteriorate, it could increase that figure to US$16.6bn. The company also said that it will accelerate 47,000 job cuts.

President Obama signed into law the US$787bn stimulus bill Tuesday afternoon. Both chambers of Congress approved the bill last week, largely along party lines. The package includes at least US$290bn in tax provisions, as well as billions in aid and spending.

The financial sector suffered a big setback last week after Treasury Secretary Tim Geithner’s bank bailout plan failed to provide the requisite detail that would have reassured investors. Bank stocks continued to plunge, with the KBW Bank index losing 10%.

Wal-Mart reported lower quarterly earnings that, excluding charges, topped analysts’ estimates. However, the world’s largest retailer forecast first-quarter earnings that are short of forecasts. Shares gained 3.7%.

Trump Entertainment Resorts filed for Chapter 11 bankruptcy protection, as the recession and weaker gambling revenue took a toll. Shares fell nearly 22%.

The day’s one economic report of note was much weaker than expected. The N.Y. Empire State index, a regional manufacturing report, fell to negative 34.65 in February from negative 22.2 in the prior month. Economists expected a smaller decline.

Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.65% from 2.89% on Friday. Bond markets were closed on Monday. Treasury prices and yields move in opposite directions.

Lending rates inched higher. The 3-month Libor rate was 1.25% on Tuesday, up from 1.24% on Friday. The overnight Libor rate rose to 0.31% from 0.30%. Libor is a bank lending rate.

US light crude oil for March delivery fell US$2.58 to settle at US$34.93 a barrel on the New York Mercantile Exchange. Gasoline prices decreased half a cent to a national average of US$1.96 a gallon.

The dollar gained against the euro and fell against the yen. COMEX gold for April delivery rose US$25.30 to settle at US$967.50 an ounce.

source: IndiaInfoline

Tags: calls, daytrading, free calls, intraday, tips

Similar Posts:

• Wall Street set for best month in 6 years on tech, banks
• Stocks Edge Up on Expectations of Fed Move; Dow Hits 11,000 for First Time Since May- Wall Street
• Wall Street Hit by Worries on Economy, Greece but recovers from days low
• Stocks drop as investors worry about consumers – Wall Street
• Stocks drop as Bernanke warns of uncertain economy – Wall Street