News of the Bear Stearns bailout triggered a sell-off today as investors were reminded that the true depth and breadth of current credit problems remains uncertain, the Wall Street Journal reports. Bear Stearns stock closed at 30, down a breathtaking 47.4% on the day. The Dow fell 194.65 to 11,951.09, the Nasdaq 51.12 to 2,212.49, and the S&P 500 27.34 to 1,288.14.
Citigroup, Bank of America, American Express, and AIG were among the financials dragged down in Bear Stearns' wake. The fact that even dramatic moves by the Fed haven't quelled the uncertainty makes it that much worse, analysts say. "There's a series of policy mistakes or failures that have led to this," one strategist said. "There's a massive amount of liquidity far in excess of what there's demand for."