Markets Brief
Investors Flee Stocks
Carl Gutierrez, 10.06.08, 3:10 PM ET

Stocks were sliding into the last hour of trading on Wall Street on Monday, with investors abandoning equities as worries about the state of the world financial system consumed them despite the historic U.S. bailout instituted last week.

The losses were significant: the Dow Jones industrial average tumbled 6.9%, 713.88 points, to 9,611.50, while the Nasdaq Composite index sank 8.3%, or 162.04 points, to 1,785.35, and the S&P 500 index fell 7.7%, or 85.09 points, to 1,014.14.

So far this year, the Dow is off 27.5%; the S&P 500, 30.9%; and the Nasdaq Composite, 32.7%, nearly a third of its early-year value.

A realization that the bailout would not have any near-term effect seemed to be at the heart of the rout. The House of Representatives voted down the bill at the start of last week, sending shares sliding, but after the Senate passed it, the lower chamber reconsidered.

"We saw the market go down after the bailout didn't pass, and we saw a market that went down even more after it did pass, so at this point it looks like traders and investors are just looking for an excuse to sell," said Cleveland Rueckert, an analyst at Birinyi Associates.

Markets have been falling around the world on credit and recession fears, with government intervention appearing to have no effect. (See "Stocks On A Downward Spiral.")

The only asset class that held any appeal was government bonds. The yield on the 10-year U.S. Treasury note, which moves inversely to its price, fell to 3.44% from 3.65% as investors piled in.

"There doesn't seem to be a short-term solution," Rueckert said, "and with earnings season starting tomorrow a lot of people are very nervous with companies coming out with enormous misses."

By afternoon trading only 84 stocks on the New York Stock Exchange advanced, while 3,136 fell, totaling a 99.0% volume for declining tickers. The picture was similar at the Nasdaq, which saw 242 stocks advanc,e while 2,737 fell, totaling 97.7% volume for declining tickers.