US STOCKS-Wall St hammered by AIG fallout, bank concerns
Mon Mar 2, 2009 2:19pm EST Email | Print | Share| Reprints | Single Page[-] Text [+]
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More Business & Investing News... * AIG has biggest loss in U.S. corporate history
* Dow industrials fall below 7,000; financials slump
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* Dow off 3.1 pct; S&P off 3.6 pct, Nasdaq off 3.1 pct (Updates to midafternoon, changes byline)
By Leah Schnurr
NEW YORK, March 2 (Reuters) - U.S. stocks skidded to fresh multiyear lows on Monday as the government bailed out American International Group (AIG.N) again and reported a record $61.7 billion loss that raised fears efforts to stem the financial crisis still are not enough.
The Dow Jones industrial average fell to its lowest since April 1997 on an intraday basis, hit by selling in financial, energy and industrial stocks, while all 10 S&P sectors were in the red.
Among financials, Goldman Sachs (GS.N) fell 3.7 percent to $87.72 while Morgan Stanley (MS.N) slid 7.8 percent to $18.02. The S&P financial index .GSPF shed 5.3 percent.
"They're trying to make it workable for AIG but even at that, what's noticeably missing is any type of comment as to the end-game," said Paul Nolte, director of investments at Hinsdale Associates, in Hinsdale Illinois.
"When does this end? What are the sign posts that we're all going to be looking at to indicate to the government that this is working or that we are seeing a turn around?"
Investors fretful about the dire state of the economy and poor prospects for corporate profits also dumped shares of large manufacturers, with 3M Co (MMM.N) off 4.6 percent at $43.37 and Caterpillar Inc (CAT.N) down 8.3 percent to $22.56.
The Dow Jones industrial average .DJI tumbled 219.75 points, or 3.11 percent, to 6,843.18. The Standard & Poor's 500 Index .SPX gave up 26.61 points, or 3.62 percent, at 708.48. The Nasdaq Composite Index .IXIC lost 42.13 points, or 3.06 percent, to 1,335.71.
Since the start of 2009, the Dow has lost more than 22 percent, while the S&P 500 is off more than 21 percent after attempting a rally off November lows. Since the market's October 2007 record high, the Dow Jones Wilshire 5000 index .DWCF -- one of the broadest measures of U.S. stocks -- is down more than 50 percent, or about $10 trillion.
Under the government's latest revised rescue plan, AIG will gain access to up to an additional $30 billion in new capital. For details see [ID:nN02363433]. Last fall, AIG received a commitment for $150 billion in government aid. The company, once the world's largest insurer, also reported a fourth-quarter loss on Monday that was the biggest in U.S. corporate history.
Shares of AIG rose 7.1 percent to 45 cents on the New York Stock Exchange.