- The Washington Times - Wednesday, February 18, 2009

Wall Street nose-dived Tuesday, burdened with worries ranging from the worsening global economic situation to the U.S. banking system and how long it will take for federal action to turn around the recession.

The markets ignored President Obama’s signing of his $787 billion stimulus package, as the three major indexes plunged more than 3 percent. The Dow Jones Industrial Average came within less than a point from its bear-market low on Nov. 20, and the Standard & Poor’s 500 slipped below 800 for the first time since Nov. 21.

At the close, the Dow Jones Industrial Average dropped 297.81, or 3.79 percent, to 7,552.60. The tech-heavy Nasdaq Composite Index plummeted 63.70, or 4.15 percent, to 1,470.66. The broader S&P; 500 sank 37.67, or 4.56 percent, to 789.17.

Bank stocks, especially those of regional banks, led the sell-off on light volume. Twenty of the Dow’s 30 stocks declined, CNBC said.

Wall Street’s plunge deep into negative territory came as Mr. Obama signed the stimulus legislation into law in Denver, saying it marked “the first step to set our economy on a firm foundation.” But the markets want clear indications of when the new law will start pumping money into the economy, officially in recession for 14 months.

Japan’s 12.7 percent drop in its gross domestic product for the fourth quarter of last year, its worst showing since the 1974 oil embargo, served to underscore the severity of the deepening recession worldwide.

A bright spot was Wal-Mart Stores Inc. because of a favorable earnings report in a market that is looking for any sign of hope; it opened up more than 1 percent.

The world’s largest retailer said its profit for the fourth quarter of its fiscal year that ended Jan. 31 fell 7.4 percent, but the company said the reason for that largely was because of the strong dollar and its cost of settling a labor suit.

Excluding those reasons, earnings were $1.03 a share, which beat the 99 cents per share predicted by analysts surveyed by Thomson Reuters. They outperformed the company’s own expectations of earnings of between 91 cents and 94 cents a share. Wal-Mart stock increased in premarket trading.

The retailer, based in Bentonville, Ark., said it earned $3.79 billion, or 96 cents a share, in the three months ended Jan. 31 compared with $4 billion, or $1.02 a share, a year ago. Sales at stores open at least a year rose 2.8 percent, an indicator that recession-weary shoppers were out looking for bargains.

The dollar rose again, a common occurrence in the past few weeks whenever stocks show weakness. Gold also jumped more than $28 to about $971 an ounce. It has been climbing steadily in value during the past few weeks as market uncertainty makes it seem a safe haven for investors.

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