Bad News Spurs Big Sell-Off

Poor results at AIG, nervous retailers, rising oil all contribute to decline
By Nick McMaster,  Newser Staff
Posted Aug 7, 2008 3:25 PM CDT
Martin J. Sullivan, CEO of AIG, speaks to reporters during a new conference in New York in this file photo.   (AP Photo)
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(Newser) – The markets suffered big losses today as investors were confronted by bad news from retail and financial giants, as well as a 6-year-high in weekly unemployment, the Wall Street Journal reports. The Dow fell 224.64to 11,431.43. The Nasdaq lost 22.64 to finish at 2,355.73, and the S&P 500 fell 23.12 to 1,266.07.

Insurer AIG fell 17% after dashing analysts’ expectations with a $5.36 billion quarterly loss, its third in a row. Wal-Mart dropped 5%, even with an increase in revenue, as it forecast slowed sales for August. Investors are beginning to worry that the credit crisis is nullifying the Fed’s action, as borrowing costs remain high despite relatively low rates.