Dow Falls 427 to Below 8,000

Bad news in housing and predictions of recession sour stocks
By Nick McMaster,  Newser Staff
Posted Nov 19, 2008 3:21 PM CST
Trader Michael McCabe works on the floor of the New York Stock Exchange.   (AP Photo)
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(Newser) – Stocks plunged today on a spread of bad economic news, including signs that the housing market is not improving and dire predictions by the Federal Reserve’s interest-rate committee, the Wall Street Journal reports. The Dow fell 427.47 to close at 7,997.28. The Nasdaq lost 96.85, settling at 1,386.42, while the S&P 500 shed 52.54 to close at 806.58.

Newly released minutes from the Federal Open Market Committee’s meeting showed that its members predict that the US would see four quarters of shrinking GDP, and indicated that further interest-rate cuts are possible at its next gathering. There’s now a “genuine risk that the US economy could fall into a corrosive deflationary phase,” one analyst tells the Financial Times.