Released: October 07, 2008

Fears of recession deepen as markets plunge

Source: Walter Hamilton,, Martin Zimmerman & Tiffany Hsu, L.A.Times

The collapse of stock markets worldwide Monday reflects deepening concerns that government intervention won’t be enough to stave off a potentially severe global recession.

“Recession is unavoidable at this point,” said Marc Pado, stock market strategist at Cantor Fitzgerald. “Now it’s just a matter of depth.” Despite the $700-billion bailout bill enacted last week, the Dow Jones industrial average plummeted 800 points, or 7.7%, before rebounding to close down nearly 370 points. The blue-chip barometer fell below the 10,000 level for the first time in four years. Stock markets in Europe plunged as much as 9% after a series of hastily arranged bank rescues there over the weekend.

Beyond the stock market, credit remained extremely tight, economic worries sent crude oil sinking more than $6 to less than $90 a barrel, and fearful investors huddled in super-safe Treasury securities—the financial equivalent of hiding under the covers until the storm passes.

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