Dow tanks 387 points -- more to come?

Posted Aug 9th 2007 5:35PM by Jonathan Berr
Filed under: After the Bell, Major Movement, International Markets, Citigroup Inc. (C), JPMorgan Chase (JPM), Goldman Sachs Group (GS), DJIA

The Dow Jones Industrial Average fell 387.18 points today to 132,270.68, its worst loss since Feb. 27's 416-point plunge. Fasten your seat belts ladies and gentlemen, the bumpy ride has just begun.

The worry that investors had about the meltdown in the subprime mortgage market has morphed into downright panic. All of the Zoloft and Xanax in the world isn't going to calm the frayed nerves of investors worried about rising mortgage defaults among people with credit that had been good until now.

Shares of brokerage houses including Goldman Sachs Group Inc. (NYSE: GS), JP Morgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) are getting pounded. Bloomberg News pointed out that volume at the New York Stock Exchange was at its highest level since 2002. Markets in Europe also are tanking.

"It looks hideous out there," Morgan Keegan & Co. John Wilson told Bloomberg in what could be the understatement of the year.

Of course, things don't stay horrible forever. Experienced investors know they have to be patient as the market corrects itself as if it were somehow wrong in the first place. Look for market pundits to point out the usual suspects, including retail sales which so far have been a mixed bag.

Even though things may look bad now, over the long term most people are better off having a good portion of their assets allocated in the stock market. Over time, that's proven to be the best strategy. Remember that as your eyes well up with tears when you read your next brokerage statement.

Tags: c, Citgroup, featured, Goldman Sachs, GoldmanSachs, gs, inthenews, leh, Lehman, mer, nasdaq, nyse, stock marekt, stock market, StockMarekt, StockMarket, stocks

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Reader Comments (Page 1 of 1)

8-10-2007 @ 8:50AM

Ron Spencer said...

This isn't 1987. We aren't likely to see a frepeat, cause
the likely volume of bad debt/credit isn't THAT significant but the fear is there and it is nagging and worrisome. Is
this teh beginning of a recession or will that await the 08
China Olympics and the dexclaration of a pro-regulatory
Demo Congress and presidency? Will the Fed take charge
and favor equities with a 50 basis point decline to assist
an economy that may falter? Only the SHADOW knows.
But IPO creation and LBO/M&A action is likely dead.
My view is the market trudges onward with a long
pause but no immediate plunges. It's endemic and thus
must be worked out of the system. Only if the Bulls
with instutions, frazzled hedge fun action and programmed trading can overcome reality will the market forge ahead undaunted. My bet is Bulls 3, Bears 3 for the next 6 months.