US stocks fell sharply Thursday, socking the Dow with its second worst close so far this year, as reports of liquidating hedge funds triggered more credit-related anxiety, which earlier led three central banks to intervene in an attempt to calm markets.
Dow Jones industrials extended its series of triple-digit swings and fell more than 380 points. The catalyst for the market's latest skid: a French bank's announcement that it was freezing three funds that invested in U.S. subprime mortgages. The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone -- institutions, investors, companies, individuals -- can't get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about tight credit and bad subprime mortgages.
Bad U.S. home loans have already hit a number of hedge funds and financial institutions in the U.S., Australia and in Germany. Following the news, the European Central Bank said it allocated 94.841 billion euros, or about $ 131 billion, to 49 bidders in a one day quick tender at 4.0% to add liquidity to the money markets, a step the ECB last made the day after September 11, 2001.
The Dow fell 387.18, or 2.83 percent, to 13,270.68. Thursday's pullback continued an erratic pattern of triple-digit moves in the Dow since the index closed at a record 14,000.41 on July 19. Eleven of the 15 ensuing sessions have ended in a triple-digit gain or loss. Gains have been evaporating at the first mention of trouble in housing, subprime lending or the credit markets.
With Thursday's decline, the Dow is about 730 points, or 5.2%, below its record close. Some experts have been calling for a textbook correction -- a pullback of at least 10%. At its lowest close since the market's high, Friday's finish of 13,181.91, the Dow was 5.85% below the record.
Bonds rose sharply Thursday as investors again sought the relative safety of Treasurys, pushing down the yield on the benchmark 10-year note to 4.79 percent from 4.89% late Wednesday. The broader Standard & Poor's 500 index fell 44.40, or 2.96%, to 1,453.09.
Before Thursday, the S&P had its best three-day winning streak in nearly five years. But the latest pullback was the biggest point drop and percentage loss for both the Dow and the S&P since a market decline on Feb. 27., that owed in part to concerns about subprime loans. The Nasdaq composite index fell 56.49, or 2.16%, to 2,556.49. On Wednesday, it posted its biggest point gain in more than year. And while Thursday's loss was sharp, last Friday's was more severe.
At the New York Stock Exchange, volume hit nearly 2.8 billion shares, with declining issues outpacing advancers nearly 4 to 1. At the Nasdaq, 3.5 billion shares exchanged hands, with declining stocks topping advancing issues by nearly 2 to 1.
Dow Jones industrials extended its series of triple-digit swings and fell more than 380 points. The catalyst for the market's latest skid: a French bank's announcement that it was freezing three funds that invested in U.S. subprime mortgages. The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone -- institutions, investors, companies, individuals -- can't get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about tight credit and bad subprime mortgages.
Bad U.S. home loans have already hit a number of hedge funds and financial institutions in the U.S., Australia and in Germany. Following the news, the European Central Bank said it allocated 94.841 billion euros, or about $ 131 billion, to 49 bidders in a one day quick tender at 4.0% to add liquidity to the money markets, a step the ECB last made the day after September 11, 2001.
The Dow fell 387.18, or 2.83 percent, to 13,270.68. Thursday's pullback continued an erratic pattern of triple-digit moves in the Dow since the index closed at a record 14,000.41 on July 19. Eleven of the 15 ensuing sessions have ended in a triple-digit gain or loss. Gains have been evaporating at the first mention of trouble in housing, subprime lending or the credit markets.
With Thursday's decline, the Dow is about 730 points, or 5.2%, below its record close. Some experts have been calling for a textbook correction -- a pullback of at least 10%. At its lowest close since the market's high, Friday's finish of 13,181.91, the Dow was 5.85% below the record.
Bonds rose sharply Thursday as investors again sought the relative safety of Treasurys, pushing down the yield on the benchmark 10-year note to 4.79 percent from 4.89% late Wednesday. The broader Standard & Poor's 500 index fell 44.40, or 2.96%, to 1,453.09.
Before Thursday, the S&P had its best three-day winning streak in nearly five years. But the latest pullback was the biggest point drop and percentage loss for both the Dow and the S&P since a market decline on Feb. 27., that owed in part to concerns about subprime loans. The Nasdaq composite index fell 56.49, or 2.16%, to 2,556.49. On Wednesday, it posted its biggest point gain in more than year. And while Thursday's loss was sharp, last Friday's was more severe.
At the New York Stock Exchange, volume hit nearly 2.8 billion shares, with declining issues outpacing advancers nearly 4 to 1. At the Nasdaq, 3.5 billion shares exchanged hands, with declining stocks topping advancing issues by nearly 2 to 1.
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