Stocks Drop Worldwide as Glow Wanes Around Presidential Election
- Nov 06, 2008
Excitement over President-Elect Barack Obama’s victory Tuesday spurred the country’s biggest election day gains in more than 20 years, but the party was short-lived as stocks began dropping Wednesday afternoon. As the finger-pointing continues in the financial world, Lehman Brothers Holdings Inc.’s CEO Richard Fuld will be pounding the pavement at year’s end after getting his walking papers from the bankrupt company, according to a Bloomberg.com report. Lehman Brothers earned a record $4.2 billion last year, before spiraling under subprime and structured investments, listing $613 billion in liabilities in its bankruptcy petition. Lehman is also the subject of three federal criminal probes. Financial shares took the biggest hit as the Dow Jones industrial average fell more than 500 points, according to CNNMoney.com. The blue-chip index ended at 9,139.27, off 486.01 points, or 5.1 percent. On Wednesday, all of the Dow’s 30 components posted late-session declines, with the losses led by Citigroup Inc., off 14 percent and Bank of America Corp., down 11.3 percent. General Motors Corp. erased earlier gains, off 2.8 percent. The Detroit Free Press reported that Detroit’s automakers and the UAW president are to meet with House Speaker Nancy Pelosi today to discuss the possibility of a second $25 billion loan to the companies, as General Motors Corp. prepares to report financial results Friday that will sound new alarms about the industry’s need for aid. The industry has reported the worst sales month in 25 years, but received good news Wednesday when the Bush administration announced the rules for the first round of $25 billion in loans aimed at retooling plants, pledging to speed the money to automakers as quickly as it could. Around the globe, Reuters reported that Tokyo-based Toyota Motor Corp, the world’s No.1 automaker, warned operating profits will sink to a 13-year low this year down 74 percent from a record year in 2007. European stock markets, too, traded sharply lower Thursday following overnight losses in Asia, as investors fretted about the global economy ahead of expected interest rate reductions later from the European Central Bank and the Bank of England, according to the Associated Press. The FTSE 100 index of leading British shares was down 146.82 points, or 3.2 percent, at 4,383.91, while Germany’s DAZ was 169.40 points, or 3.3 percent, lower at 4,997.47. France’s CAC-40 was down 121.79 points, or 3.4 percent, at 3,496.32. The losses on Wall Street triggered a renewed bout of selling in Asia with Japan’s Nikkei stock average down 6.5 percent at 8,899.14, and Hong Kong’s Hang Seng Index 7.1 percent lower at 13,790.04, according to the Associated Press.