Stock prices slide again by Claudia Sonea

During the summer stock market suffered severe losses because of the huge volatility and despite the Fed's rate cut Wall Street has not yet recovered. On Wednesday due to the wave of worries about spreading fallout from the credit crisis at banks and about a dollar that just keeps getting weaker bank stocks faced exacerbated declines. To all that summed up the New York Attorney General Andrew Cuomo's statement about conflicts of interest in the mortgage industry, the rumors of China diversifying some of its foreign currency stockpiles beyond the greenback, General Motors Corp's post of a record loss and oil record price- $98 per barrel before retreating. The main concern is that Wall Street doesn't even know the extent of the slide from the credit market crisis that has led to billions of dollars in losses for major banks and investment firms. Furthermore, Citigroup Inc.'s announcement on Sunday that to the $11 billion in writedowns it will add another $8 billion made the investors restless. David Darst, chief investment strategist for Morgan Stanley's global wealth management group said that it is normal for the market to be troublesome when the supposed financial bodyguards are sliding and the investors fear the unknown. The Dow, which had gained 117 points on Tuesday, fell 360.92, or 2.64 percent, to 13,300.02. The Standard & Poor's 500 index fell 44.65, or 2.94 percent, to 1,475.62, while Nasdaq composite index fell 76.42, or 2.70 percent, to 2,748.76. Still their stock prices are up from the last year 6.71 percent in the case of the blue chip Dow, S&P 500 is up 4.04 and the best increase in this ruff conditions represents the 13.81 percent of Nasdaq. Due to NYSE composite index drop there were imposed restrictions in order to stabilize the market and also to prohibit some sell orders. The yield on the 10-year Treasury note also dropped 4.34 percent. Cuomo in its inquiry into what he regards as conflicts of interest in the mortgage industry led to the fell in share price of Washington Mutual Inc. because supposedly it is guilty for the inflated home prices nationwide. Furthermore, he issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac which also registered drops afterwards. The dollar lost ground against the 13-nation euro and especially after the spreading of the rumor that a senior Chinese political figure said China should spread its $1.43 trillion foreign exchange reserves beyond the dollar into the euro. That helped in keeping pressure on the oil price that settled at $96.37 per barrel on the New York Mercantile Exchange. St. Louis Fed President William Poole stated that there has been made progress into returning to normal, but there is still need for more rate cuts from the Fed. However, that could lead to the dollar's downfall and investors could seek better interest rates elsewhere. As it is, no clear decision can be taken and no one can foretell what will happen, so don't go away.

related story: http://news.yahoo.com/s/ap/20071107/ap_on_bi_st_ma_re/wall_street;_ylt=AhhZQTzcZDVsY9SM0ebBMcGs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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