Global Markets plunge despite Sale of bear Stearns and Rate Cut

Global Markets plunge Desptie Sale of bear Stearns and Rate Cut

www.huffingtonpost.com

In the first minutes of trading, the Dow Jones industrial average is trading down 182 points at the 11,768 level.

U.S. stocks headed for a sharply lower open Monday as Wall Street and other global markets reeled from JPMorgan Chase & Co.'s government-backed buyout of faltering investment bank Bear Stearns Cos.

On top of supporting the buyout, the Federal Reserve took the extraordinary step of lowering the rate it charges to loan directly to banks just two days before its scheduled meeting Tuesday. The central bank lowered the discount rate by a quarter point to 3.25 percent.

Stock markets across Europe fell 2 to 3 percent soon after opening on Monday, following drops on major Asian stock markets of 3 to 5 percent. Tokyo's benchmark index hit a three-year low before it rebounded slightly; Chinese and Indian stock markets tumbled even more sharply.

In the United States, stock futures plunged overnight, indicating that the markets would open to heavy losses. Futures in the Dow Jones industrial average were down more than 200 points.

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[edit on 17-3-2008 by grover]

[edit on 17-3-2008 by grover]

This cannot be good. The Feds cut rates again and earlier than expected. A major investment house was sold before it collapsed and still none of that it seems has had any effect.

We are in for a rough ride.



www.huffingtonpost.com
(visit the link for the full news article)

It will be interesting to see how this plays out over the next few days. If i recall correctly trading is stopped automatically if the market drops by 300 or so points. With an inital drop of 182 points, if they continue, the market might be shut down sooner than later.