Of interest
Demand for safe short-term Treasury bills became so heavy that the yield of the three-month and one-month Treasury bills fell to just 0.04%, almost nothing. The yield of the two-year Treasury note fell to 1.01%, its lowest late-day level in more than 35 years.
The S&P 500, against which hundreds of billions of dollars in index funds are invested, now has given up all the gains of the 2002-2007 bull market and a big part of the gains of the late 1990s. It fell 54.14 points, or 6.7%, to 752.44, pushing it below its lowest finish in the 2000-2002 bear market that followed the technology-stock collapse, which had been 776.76.
Markets on the Move
The Dow Jones Industrial Average, which is less exposed than the S&P 500 to financial stocks, was pounded, but hasn't fallen as far. It declined 444.99 points, or 5.56%, to 7552.29, its lowest finish since March 2003, 5½ years ago.
If the S&P 500 were to finish the year where it was on Thursday, it would mark an annual decline of 48.8%, the worst annual percentage drop in its 80-year history. In all, the index is down 52% from its record finish of just over one year ago. That means that the S&P has fallen more in the current bear market than it did in the horrendous bear market from 2000-2002, when it fell 49%.
The Dow is off 47% from last year's record, its heaviest decline since the bear market of 1937-1938, when it fell 49%. It is down 43% for the year so far. If it doesn't improve, that would make this the second-worst yearly pullback since it was launched in 1896. The worst was 1931, when it fell 53%.
Some traders said stock selling in recent days may have been magnified by late-day margin calls, or forced selling by firms and individuals who had borrowed money using stock as collateral. When the stock value falls below the value of the loan, the investors can be forced to sell and repay the loan. |
