With investors unconvinced the government’s $700 billion bailout or the Fed’s new plan to buy commercial paper will thaw frozen credit markets, markets remained trapped in “a downward spiral of fear,” reports BusinessWeek. The Dow’s 29% loss this year is its worst since 1937’s 32.8% drop. But it still has a ways to fall before it outdoes the market’s worst year ever: 1931 when the Dow plunged 52.7%.
Yesterday’s drop was the fifth in a row for the Dow, which has lost 13% in 5 trading days—joining a 14.6% decline for the S&P 500—and is off 33% from the record high of a year ago, reports the New York Times. The selling continued as jittery small investors bailed out and traders ignored Ben Bernanke’s hints that another interest rate cut was on the near horizon.