Stocks Down Sharply Despite Bailout Deal

Wachovia failure sends markets downward
By Kevin Spak,  Newser Staff
Posted Sep 29, 2008 9:03 AM CDT
Wachovia CEO Ken Thompson is shown in this file photo. Wachovia is selling itself to Citi, making it the latest casualty of the financial contraction.   (AP Photo/Chuck Burton, File)
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(Newser) – Stocks once again headed downward at the open this morning, as Wachovia’s selloff stoked fears that the bailout wouldn’t be enough to save financials. The Dow fell 275 points while the Nasdaq dropped 3.6% and the S&P fell 3.1%. “The Fed's bailout plan may be making some progress but there's a general air of disappointment as to the slimmed down proposals,” said one trader.

In a bizarre turn, no bell rang at the NYSE, but trading opened on schedule anyway. Wachovia plunged 82% in premarket training, on news that Citigroup would be acquiring most of its operations. Anxiety was also fueled by aggressive selling abroad, with Europe’s Dow falling 3.2%. “There's an increasing realization that the cleanup is going to take an extended period,” said one Australian broker. (Read more market stories.)