Financial Market Update: After the Closing Bell-Wed., Oct. 15

Oops, there it goes again. At the end of the day Wednesday, the Dow Jones Industrial Average was down some 733.08 points, or 7.87 percent. Most of the Monday’s surge has evaporated. The Standard & Poor’s 500 was off 9.03 percent, and the Nasdaq lost 8.82 percent. What’s stampeding investors now? Bad numbers from the wider economy, especially retail sales. Some of that dead-cat bounce was evident in Hong Kong Wednesday, as the Hang Seng Index lost about 5 percent. Japanese stocks also traded lower much of the day as well, but the Nikkei 225 ended up with a 1.1 percent gain. In the U.K., the FTSE 100 fell 7.2 percent, after rising for a while. The benchmark DAX in Germany slumped 6.49 percent. These movements aren’t in the same league as last week’s wild ride, but perhaps indicate that investors are realizing that after the Panic comes the Recession. Are we (that is, the global economy) still on the edge of abyss? Ask Dr. Nouriel Roubini and he might say yes, and I told you so. The professor of economics at New York University, known for his dire predictions back when the financial industry was too busy oozing toxic mortgage-backed securities to care, has recently been all over the media. The media loves a vindicated prophet of doom. Now, just in time for Halloween, there’s this.LIBOR (the London Interbank Offered Rate), the rate that banks charge each other for three-month dollar loans, dropped a little in London today, down 9 basis points to 4.55 percent. For reasons best known to bankers, LIBOR is insanely important, used for setting rates on financial contracts, including corporate debt worldwide. Both Wells Fargo and JP Morgan Chase &Co., major survivors (thus far) of the Panic of 2008, have posted lower profits, but actually did better than expected. In the case of Wells Fargo, net income during 3Q08 was $1.64 billion (49 cents a share), representing a 24 percent drop from the same period a year ago. Analysts had expected 43 cents a share, according to Bloomberg. As for JP Morgan, net income in 3Q08 skidded downward by 84 percent to $527 million, or 11 cents a share, compared with the same quarter in 2007. But that was counting a $581 million gain made on the WaMu deal. Count that out and the behemoth New York bank lost 6 cents a share–better, again, than the 18 cents those gloomy analysts had forecast.