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Washington Post Staff Writers
Friday, March 6, 2009; Page A01
President Obama and his aides this week were selling hope. The markets aren't buying.
Two days after the administration sought to restore calm to the markets, major indexes yesterday plunged more than 4 percent on a cascade of bad economic and corporate news.
General Motors' auditors raised "substantial doubt" about the automaker's ability to survive on its own, pushing the company's shares down. Moody's Investors Service said it might downgrade the long-term debt rating of Wells Fargo, causing investors to unload shares of the bank. And shares of Citigroup -- one of the biggest holdings in the government's bulging portfolio -- briefly traded below a dollar before bouncing back across that threshold later in the day.
The downdraft was global, with every major world market down steeply. Trying to contain the damage of this recession, the European Central Bank cut interest rates, as did the Bank of England, which announced that it would follow in the steps of the Federal Reserve by buying assets to push down a broader range of rates. Lending markets yesterday were increasingly strained, with the rates banks charge to lend to each other inching upward. The Dow Jones industrial average finished 4.1 percent lower yesterday, at 6594.44, its lowest close in 12 years. The blue-chip index has lost 20 percent of its value in just under a month.
Caught in the Financial Downdraft - washingtonpost.com
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