Friday, 5 August 2011

Wall Street | The seeds of the next free world recession

Wall St in biggest plunge since GFC

Wall St
Traders watch as Wall St plunges 4.3 per cent. Source: AP

US stocks plunged this morning in the biggest sell-off since the financial crisis, driving the Dow Jones Industrial Average down more than 500 points, as investors appeared to lose faith in the ability of the world's policy makers to revive the global economy and stave off a rolling debt crisis in Europe.

The Dow kept cascading lower throughout the session. It finished just off the lows with a 512.76-point decline, or 4.31 per cent, to 11,383.68, erasing all its gains for 2011.

The slump of the past few weeks has driven the Dow down more than 10 per cent from its May intraday highs -- putting the index officially in correction territory.

It was the measure's biggest single-day loss since December 1, 2008, when the Dow plunged 679.95 points at the height of the financial crisis, one of the market's worst days ever.

The Standard & Poor's 500-stock index fell 60.27 points, or 4.78 per cent, to 1200.07. The S&P and Nasdaq Composite also moved into correction territory. The Nasdaq slumped 136.68 points, or 5.08 per cent, to 2556.39.

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