Dow ends at lowest point in three months
It was a tough day for investors today, as an proposed Obama plan on limiting the lending practices of big banks, China’s own plans to limit their banks lending practices and downgrades in the tech sector all compiled for a harsh sell off day.
As it was much of the news yesterday, President Barack Obama gave a town hall meeting today in Ohio on a proposed plan his administration has on placing restrictions on lending for the big banks in an effort that will halt the financial institutions to pass on fees and costs to American tax payers. The specifics of the plan is to place rules and regulations that will limit the ability of banks to engage in risky trades and stop them from owning or investing in hedge funds. It’s an attempt from the president to make sure these banks don’t get into the financial trouble they got themselves in 2007.
Meanwhile there is the real possibility that Federal Chairman Ben Bernanke could not be confirmed for a second term. At current time he lacks the 60 senate votes to gain a confirmation. Warren Buffett expressed concern on a CNBC interview, stating that “chaos would happen.” He approves of the job Bernanke has done.
Strong quarterly earnings from General Electric, which posted above analyst forecasts, Mc Donald’s and American Express could not start a late day rally.
The Dow Jones saw the biggest hit of 2010 and with a triple digit lost of 216.90 points to close on a three month low of 10172.98. The S&P 500 Index suffered a 2.21% to close at 1,091.76. The index took major hits in its financial and technology sectors.
The tech heavy Nasdaq was affected by a 4.8% lost in Google shares. The Internet giant posted huge fourth quarter gains but investors may think the introduction of the Nexus One phone may hurt the company in the long run. Citigroup announced a group of downgrades today cutting its ratings on seven semiconductor-equipment stocks, this of course did not help the Nasdaq much as by the end of the bell it closed at 2,205.29.
Gold continues to fall from it’s once record high of 1,218.30. It settled at 1,089.70 an ounce. Commodities took a hit as well as oil lost $1.54 to settle at $74.54 a barrel.
Europe felt the hit as well as all major trading indexes were down on that front. In France the CAC changed 41.38 points closing at 3,820.78, the German DAX slipped 51.65 points closing at 5,695.32 and in London the FTSE 100 was down 32.11 points slipping to 5,302.99. In Tokyo the Nikkei got spanked losing 277.86 points, losing 2.56%.