Today’s Market Reminds Obama There’s Lots of Work To Do
The Dow shed 332 points today, as financial stocks took yet another deserved beating.
The Royal Bank of Scotland announced its for 2008 may be more than $40 billion and in this global market, global economy and global recession, U.S. financial stocks lost value. From the Associated Press:
Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points. Although traders on the floor of the New York Stock Exchange paused to watch the inauguration ceremony and Obama’s remarks, the transition of power didn’t erase investors’ intensifying concerns about struggling banks and their impact on the overall economy.
The market’s angst, which began with multibillion losses reported last week by Bank of America Corp. and Citigroup Inc., intensified after the Royal Bank of Scotland’s forecast that its losses for 2008 could top $41.3 billion.
The collapse in bank stocks was swift Tuesday: State Street Corp. plunged 59 percent, Citigroup fell 20 percent and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.
The shrinking value of bank stocks means the financial industry accounts for less than 10 percent of the Standard & Poor’s 500 index for the first time since 1992. At the end of 2006, banks made up 22 percent of the stock market benchmark.
