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Stocks Plunge as Credit Outlook Worsens

Bear Stearns downgrade stirs more trouble as Dow loses 2%

By Greg Atwan,  Newser User

Posted Aug 3, 2007 3:44 PM CDT
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(Newser) – After two straight days of gains and a steady morning the Dow plummeted in a selloff late this afternoon, losing 2% of its value to close at 13179.71, down 283.62. Bear Stearns lost big after Standard and Poors downgraded the subprime-laden i-bank from "stable" to "negative," stirring more worries over the deeply troubled credit market. Financial stocks followed expeditiously: Lehman brothers lost almost 8%.

The Nasdaq was off 64.73 to 2511.25 and the S&P fell 39.144 to close at 1433.06—a loss of more than 2.5% for both indexes. A report that job growth sank this quarter also hit the floor hard, as traders continue to worry that shrinking consumer confidence will conspire with the housing slump to curb spending.

The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in two failed hedge funds, renewing concerns that soured subprime loans will wreak financial havoc on Wall Street....
The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in...   (Associated Press)
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal Reserve Chairman Ben Bernanke, reacted to troubling forecasts from the retailers Home Depot and Sears....
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal...   (Associated Press)
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal Reserve Chairman Ben Bernanke, reacted to troubling forecasts from the retailers Home Depot and Sears....
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal...   (Associated Press)
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal Reserve Chairman Ben Bernanke, reacted to troubling forecasts from the retailers Home Depot and Sears....
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal...   (Associated Press)
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal Reserve Chairman Ben Bernanke, reacted to troubling forecasts from the retailers Home Depot and Sears....
A trader studies his handheld device as he works on the floor of the New York Stock Exchange Tuesday morning July 10, 2007. Stocks retreated Tuesday as Wall Street, nervously awaiting a speech from Federal...   (Associated Press)
Trader John Geraci, left, rubs his head as he works or the floor of New York Stock Exchange, Thursday, July 26, 2007. Wall Street suffered its second-biggest plunge of the year Thursday, leading global markets lower as investors fled stocks amid increasing uneasiness about the mortgage and corporate lending markets....
Trader John Geraci, left, rubs his head as he works or the floor of New York Stock Exchange, Thursday, July 26, 2007. Wall Street suffered its second-biggest plunge of the year Thursday, leading global...   (Associated Press)
The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in two failed hedge funds, renewing concerns that soured subprime loans will wreak financial havoc on Wall Street....
The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in...   (Associated Press)
A man rests on the steps of Federal Hall across from the New York Stock Exchange, background, Thursday July 26, 2007. Wall Street suffered its second-biggest plunge of the year Thursday, leading global markets lower as investors fled stocks amid increasing uneasiness about the mortgage and corporate lending markets. The...
A man rests on the steps of Federal Hall across from the New York Stock Exchange, background, Thursday July 26, 2007. Wall Street suffered its second-biggest plunge of the year Thursday, leading global...   (Associated Press)
Traders on the floor of the New York Stock Exchange look to an overhead monitor on a down trading day, Wednesday, July 18, 2007. Stocks retreated as investors reacted uneasily to Federal Reserve Chairman Ben Bernanke's comments on the economy and news that two Bear Stearns Cos. hedge funds were...
Traders on the floor of the New York Stock Exchange look to an overhead monitor on a down trading day, Wednesday, July 18, 2007. Stocks retreated as investors reacted uneasily to Federal Reserve Chairman...   (Associated Press)
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