Wild ride ends down for U.S. stocks

NEW YORK – U.S. stock markets ended the day down, after some of the wildest swings on record, amid fears the credit crunch will further slow consumer spending.

By the close of New York trading, the Standard & Poor’s 500 Index stood at 899.32 points, its lowest level in more than a year, after what Bloomberg News said was its worst week since 1933.


The Dow, meanwhile, saw its widest intraday point swings ever. The index lost as much 697 points – dropping more than 500 points not once but twice: after the opening bell and again in mid-afternoon – then gained as much as much as 322 points in the final hour of trading, before retreating at the close. (Its rebound was credited to a forecast that the bankruptcy auction of Lehman Bros. Holdings debt won’t exacerbate credit-market losses, Bloomberg said. But meanwhile, the cost of credit-default protection on corporate bonds soared to a record high.)

For the day, the S&P was down 10.60 points, or 1.16 percent; the Dow Jones Industrial Average was down 128 points, or 1.49 percent, at 8,451.19; and the Nasdaq Composite Index was up 4.39 points, or 0.27 percent, to 1,649.51.

Yesterday – when only one stock rose for every 20 that fell on the New York Stock Exchange, compared with one gainer for every 11 losers today – the S&P 500 had fallen for a seventh straight day, dropping 7.6 percent, as the Dow lost 7.3 percent and the Nasdaq Composite 5.5 percent. (READ MORE)

European and Asian markets also extended their losses today, into what Bloomberg called “their worst retreats on record.” The Indonesian market remained closed for the third day in a row, while Russia and Ukraine both suspended trading. Europe’s Stoxx 600 fell 7.5 percent today, extending its decline to 22 percent for the week – the deepest slump since records began in January 1987 – and paring its market value to 8.5 times company earnings.

“The problem is, the rules of valuation no longer exist,” said Pierre-Yves Gauthier, founding partner of Alphavalue SAS in Paris, told Bloomberg News. “It’s best to remain cautious. The economic slowdown is here.”

Today’s wild swings boosted the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), also known as the “fear” index, to its fifth consecutive record high.

The VIX – based on the cost of using index options for the S&P 500 to ensure against market declines – gained 6.03 points for the day, or 9.43 percent, to close at 69.95 points, triple its level at the beginning of last month, Yahoo! Finance data show. (The CBOE also has two similar indexes: the VXN, which tracks the Nasdaq 100; and VXD, which tracks the Dow.)