US stocks slumped on Monday as details of the $700 billion rescue package emerged. It would seem that even the biggest economic intervention since the Great Depression is not enough to ease investors concerns about the economy's future. Adding to these concerns, oil made its biggest one day dollar gain ever and gold rallied, as investors sought the safety of commodities over stocks.
The Dow Jones dropped 372.75 points to close at 11,015.69, the S&P 500 tumbled 47.99 points to end at 1,207.09. The Nasdaq plummeted 94.92 points to finish at 2,178.98.
Financial stocks continued their see-saw pattern of the last few weeks to lead stocks lower. JPMorgan Chase was the top drag on both the Dow and the S&P 500, tumbling 13.3%, after its stock was downgraded. Goldman Sachs and Morgan Stanley continued to be in focus after announcing that they are abandoning their investment bank model of two decades to become bank holding companies regulated by the Federal Reserve. Morgan Stanley slipped just 0.4%, having earlier been 10% higher, while Goldman Sachs declined 7%.
Microsoft, Nike and Hewlett-Packard gave a surprising show of corporate confidence by announcing plans to buy back billions in stock. Microsoft announced a $40 billion repurchase of shares having just finished one for the same amount, shares closed 1% higher. Nike said it will buy $5 billion of its own stock over 4 years, but shares still finished 0.9% lower. Hewlett-Packard announced that it would buy an additional $8 billion in stock on top of the $1.6 billion in shares it bought in its fiscal third quarter, but shares in the company closed 2.3% lower.
US light crude oil for October delivery jumped $16.37 to close at $120.92, although off an intra day high of $130! COMEX gold for gained $44.30 to close at $909 an ounce. Treasury prices fell, raising the yield on the 10 year note to 3.83% from 3.8% on Friday.
The Tokyo Stock Exchange is closed today.
The Hang Seng is currently 526.41 points lower at 19,105.79 this morning. China Mengniu Dairy Co, the country's largest milk producer, plunged by a record 59% after its products were found to contain an industrial chemical linked to at least four infant deaths. Air China Ltd, the nation's largest international carrier, retreated 4.6% after crude prices rocketed.
London has followed markets in New York and Asia lower as confidence was knocked after US authorities remained undecided over the details of a financial sector bail-out. The FTSE 100 is 83.16 points lower to 5,153.10. British Airways is one of the biggest fallers, down 5.3%, following the spike in oil prices. The LSE continues to fall on worries about a potential High Court case with PLUS Markets over "anti competitive" trade reporting. Man Group falls 4.5% after Citigroup cut its price target on the stock to 650p from 720p.