Dow Plunges 300 Points During Early Trades
10:09 am, September 22nd | by Amy Tennery
The Dow saw a sharp and dramatic drop at the open this morning, following Moody’s downgrading of Bank of America, Citigroup and Wells Fargo — along with a host of other issues, including a weak outlook from the Fed and tenuous financial performances in China and Europe.
In other words, the Dow slid roughly 300 points. And there are a lot of shoulders to carry the blame.
As CNBC pointed out, France and Germany are seeing their slowest economic growth in two years, while China saw manufacturing shrink for a third straight month — both of those conditions could have had an impact.
Of course, an alarming disclosure yesterday — the Fed’s announcement that economic recovery remains several years off — likely had a profound impact as well.
Kevin Giddis, an executive director with Morgan Keegan & Company, explained the situation pretty well to the New York Times:
“The initial and follow-up reaction from the equity market is likely the realization that the Fed has little left to offer, that Washington is a mess, and their only hope is to ‘ride it out’ over a long period of time… This is about to get ugly and there is very little anyone can do about it.”
Oh. Well that’s bad.
So, while this is hardly the 600-something point drop we saw last month after the S&P downgrade, it’s pretty effing alarming.