U.S. stocks fell today, with both the Dow Jones industrial average and the S&P 500 index dropping to their lowest levels since 1997 amid renewed concerns about banks and insurance giant AIGs ability to weather the credit crisis.
The Dow closed down 250.89, or 3.41%, at 7,114.78; the S&P 500 fell 26.72, or 3.47%, ending at 743.33; and the Nasdaq composite closed down 53.51, or 3.71%, at 1,387.72. All numbers are preliminary.
This was the lowest close for the Dow since 7,085.65 on May 7, 1997, and the lowest close for the S&P 500 since 737.65 on April 11, 1997.
Shares of American International Group closed at 53 cents, down from a 52-week high of $52.25 amid reports that the insurance group may report a fourth-quarter 2008 loss of $60 billion and require more assistance from the U.S. government, which already pledged $150 billion to keep the company afloat.
Separately, the Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision issued a joint statement pledging to stand firmly behind the banking system during this period of financial strain. The statement followed market fears of nationalization of U.S. banks.
Equity market investors worried themselves silly over fears that banking stocks would be nationalized, said Andrew Wilkinson, senior market analyst at Interactive Brokers Group.