Stocks drop for 6th session on recession fear

NEW YORK - Stocks fell for a sixth straight session on Wednesday, as a coordinated worldwide cut in interest rates failed to alleviate fears about a global recession.

It was a session of wild swings, with no clear direction determined until the final minutes. Wall Street's favourite measure of investor fear, the Chicago Board Options Exchange Volatility Index, hit a record intraday high.

In the last hour of trading, US Treasury Secretary Henry Paulson warned that the turmoil 'will not end quickly.' He also said it may be several weeks before the Treasury Department begins buying unwanted and illiquid assets from financial firms under the US$700 billion bailout programme that Congress approved last week and that is now US law.

With Wednesday's decline, the blue-chip Dow Jones industrial average has lost 14.7 per cent in the last six days - its worst such run since after the Sept 11 attacks in 2001. In terms of points, the Dow has dropped 1,594.55 points over the last six days -- its worst six-day streak ever.

The Nasdaq has lost 16.81 per cent in the last six days - its worst six-day percentage loss since April 2001.The Nasdaq has dropped 351.55 points in the last six days - - its worst six-day point loss since December 2000.

The Dow Jones industrial average fell 189.01 points, or 2.00 per cent, to 9,258.10, while the Standard & Poor's 500 Index dropped 11.29 points, or 1.13 per cent, to 984.94. The Nasdaq Composite Index was down 14.55 points, or 0.83 per cent, at 1,740.33.

Treasury Secretary Henry Paulson urged intensified global cooperation to stabilise financial markets and said countries must be careful not to harm one another while they guard their own interests. Mr Paulson recited the numerous measures that members of the G7 and others have taken to try to halt plunging stock prices and rebuild confidence, but said more was needed.

Source: Singapore Business Times - 09 Oct 2008