Bad News Brings Out the Bears

Instability in Pakistan and durable goods news sparks decline
By Nick McMaster,  Newser Staff
Posted Dec 27, 2007 3:59 PM CST
Angry Pakistani supporters of Benazir Bhutto set buses ablaze in Lahore, 27 December 2007, following Bhutto's assasination.   (Getty Images)
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(Newser) – The markets suffered steep losses today following the one-two punch of bad news from Pakistan and the Commerce Department. In the wake of Benazir Bhutto’s assassination and a disappointing durable goods report, the Dow fell 192.08, the largest drop in a week, to 13,359.61, while the Nasdaq plummeted 47.62 to 2,676.79 and the S&P 500 fell 21.39 to 1,476.27.

Citigroup fell to a 5-year low after a gloomy forecast from a Goldman Sachs analyst. The widespread decline "has a lot to do with the assassination," one analyst told MarketWatch. "The market is reacting to the bad news, and it doesn't take much to knock it down." Year-end markets typically have low trading volume, which makes them especially sensitive to to bad news.