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News Letter Reviews Why the Dow Jones industrials fell nearly 250 points
News Letter Reviews Why the Dow Jones industrials fell nearly 250 points 
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| Why the Dow Jones industrials fell nearly 250 points |
| Sunday, 09 September 2007 | ||||||||
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The market ended the week with a big dive, largely due to the Labor Department's surprisingly weak jobs report. The report showed employers actually chopped jobs in August, and it fed into investor worries that the economy is slowing down and could fall into recession. The Dow Jones industrials fell nearly 250 points, or 1.9%, to 13,113. It was the Dow's biggest loss since Aug. 28, when it fell 280 points. The Nasdaq Composite Index fell 48.6 points, or 1.9%, to 2,566, and the Standard & Poor's 500 Index was off 25 points, or 1.7%, to just under 1,454.The bottom line was that the Dow in one day shed all of its gains in the chaotic gyrations of August.
The blue-chip index lost 244 points, or just about 2%, for the week, its worst weekly loss since the week of July 30. The S&P 500 fell about 20 points, or 1.4% -- its worst loss since the week of July 30. And the Nasdaq slumped 1.2%, its worst weekly loss in a month. For the year, the Dow, S&P 500 and Nasdaq are up 5.2%, 2.5% and 6.2%, respectively. The payroll report and the market's reaction to it left many traders and investors begging for the Federal Reserve to cut interest rates at its Sept. 18 meeting, if not before. Rep. Barney Frank, D-Mass., chairman of the House Financial Services, said the jobs report should end the debate about whether a rate cut is needed. If the Fed doesn't comply, then there might well be riots on Wall Street (and with the Street now home to a BMW dealership), there are plenty of cars to flip," wrote Philippa Dunne and Doug Henwood of the Liscio Report, a newsletter that tracks state and local economies.The Fed's key federal funds rate, the rate banks charge each other for overnight loans, has been at 5.25% since June 2006. The Fed cut its discount rate -- the rate it charges member banks for short-term loans -- to 5.75% from 6.25% on Aug. 17. The discount-rate cut was part of a number of efforts by the Fed to prevent the U.S. credit system from seizing up. Markets around the world were roiled when subprime mortgage problems began to spread beyond the housing and real estate sector of the economy. Subprime mortgages were made to borrowers with little or no credit histories or with weak credit records. Source : Excerpted from MSN Money
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