Stocks Drop Nearly 700 on Recession Confirmation

Associated Press

Transcript

[Music] a Litany of V economic news has snuffed out wall Street's 5-day rally as investors realize a new how troubled the US economy really is confirmation that the nation's in a recession followed reports of only a modest gain in holiday sales well I think the mindset continues to be sell the rallies don't buy the dips and sell they did the DOW sold off more than half the 1276 points it added during a five-day rally the market began the day sliding on lackluster holiday sales reports downbeat news on manufacturing and construction spending then added to investor concern at midday Wall Street had confirmation of what everyone had suspected for months that the nation is indeed in a recession that assessment made the retail sales figures all the more unnerving to S so the focus is now on depth duration and diffusion meaning how deep is this worldwide recession likely to be how how long lasting will it be and how widespread and that is still the unknown the Dow Jones Industrials average fell 680 points to 8149 the standard and pores 500 Index dropped 80 to 816 the NASDAQ composite index fell 137 to 1398 investors had been hopeful the last week's rally was a sign that some stability had returned after months of discouraging economic reports but analysts expect that economic concerns will continue to weigh on the market for some sometime to come Mark ham the Associated Press

U.S. Officially In Recession

CBS

Transcript

the signs were everywhere but now it's official we are in a recession the research group that makes that determination made it today and said the recession actually started a year ago but the question now when will it end Wall Street is clearly worried the Dow plunged nearly 680 points today or 7.7% Anthony Mason is our business correspondent Anthony last week's big rally is now just a fond memory is what the market giveth the market also taketh away Katie remember that historic 5-day rally the bigest since 1933 well it ran into a bear today and in one big bite more than half of those gains were gone for Wall Street it was another case of Whiplash the markets haven't been this volatile in almost 80 years for the past 50 days the S&P 500 has whipsawed up and down an average of nearly 4% every day that hasn't happened since the late 1920s it's just one these markets that's just floating back and and we're back on the downside the latest slide nearly 700 points came as reports showed manufacturing activity hitting a 26-year low last month and the economy was formally and officially declared in recession the National Bureau of economic research confirmed what many already felt the recession began last December and may be far from over there is no single action the federal government can take to end the financial Market turmoil and the economic downturn stocks staged a month rally last week after president elect Obama unveiled his new economic team but the Euphoria evaporated today so basically there's a lot of problems out there that uh even though we have a great team coming in it's not a magic wand that's going to help this economy many economists now believe this downturn will be the most severe since the recession of the early 1980s which lasted 16 months and led to 75% unemployment and a record number of bank failures sounds familiar ktie while Anthony The Big Three automakers will be making a second attempt to get a federal bailout this week do you think their approach will be any different this time yeah because Congress wants to know how they're going to spend this $25 billion in bailout monies and they're expected to to present very detailed plans tomorrow the big three as to how they will restructure their businesses to become more competitive then all three CEOs will be back before Congress later in the week and you can bet this time they won't be flying in on private jets I'm sure Anthony Mason Anthony thank you