Wall Street hammered, Dow closes below 10,000
Posted: 09 February 2010 0549 hrs

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NEW YORK: US stocks tumbled on Monday amid lingering worries about debt problems in the eurozone, sending the Dow Jones industrials to a close below 10,000 for the first time since November 4.

The blue-chip Dow Jones Industrial Average slumped 103.84 points (1.04 percent) to end at 9,908.39, as a late-day sell-off accelerated in the final hour.

The Nasdaq composite shed 15.07 points (0.70 percent) to 2,126.05 and the broad-market Standard & Poor's 500 index lost 9.45 points (0.89 percent) to 1,056.74.

Global markets were fragile as investors grappled with concerns that debt-ridden countries Greece, Spain and Portugal may be unable to stabilise their public finances, having spent heavily to combat recession.

Analysts said that the problems in the eurozone raised fears about the global economic recovery, even if the immediate debt crisis is averted.

"Assuming the sovereign debt crisis is deferred through loans and outside intervention, as it must, the question then becomes whether the world recovery is progressing," said economist Donald Ratajczak at Morgan Keegan.

"Some stumbling in European confidence even before this sovereign crisis raised some concerns."

Elizabeth Harrow at Schaeffer's Investment Research said the market was also unsettled by a report indicating the US Federal Reserve was working on its plan to unwind its massive stimulus efforts.

"Traders are still considering the possible ramifications of near-crippling sovereign debt loads across the eurozone - and now, the market is facing up to the fact that the US central bank must begin to slowly unravel its wide-reaching stimulus efforts," she said.

The market reopened on Monday after four consecutive weekly declines for Wall Street and volatile sessions on Thursday and Friday that saw the Dow blue-chip index drop below 10,000 points before rebounding each day.

Some analysts pointed to a marked shift in sentiment amid a tumble from recovery highs hit in January.

"The overall mood has changed sharply. The economy hasn't changed, but a stiff correction does quickly change mood and usually a fair amount of time is required to repair the technical damage," said Al Goldman at Wells Fargo Advisors.

"The big change is that most stock prices are down and fear is up... There are few signs the correction is over so we advise investors not to chase strength but do some selected buying into sharp sell-offs."

The financial sector led the downside. JPMorgan Chase fell 1.57 percent to 37.60 dollars, Bank of America shed 3.47 percent to 14.48 dollars and Wells Fargo dropped 3.61 percent to 26.43.

CIT Group fell 0.46 percent to 30.61 dollars, erasing early gains after the business lender recently emerged from bankruptcy named as its new top executive former Merrill Lynch chief John Thain.

Among other stocks in focus, Hasbro jumped 12.69 percent to 34.71 dollars as the toymaker reported higher fourth-quarter profits and sales growth.

CVS Caremark added 5.31 percent to 32.72 dollars after the pharmacy giant beat forecasts with its latest quarterly earnings.

Bonds fell. The yield on the 10-year US Treasury bond rose to 3.592 percent from 3.546 percent on Friday and that on the 30-year bond increased to 4.522 percent from 4.493 percent. Bond yields and prices move in opposite directions. - AFP/de