Washington
US stocks plunged Thursday, with the broadbased Standard & Poor's
500 Index losing 6.7 percent to close at its lowest point since 1997
and economic indicators signaling a recession.
The S&P 500 has dropped 49 percent this year and is poised for its
worst annual decline in its 80-year history.
The New-York-based private Conference Board's index of leading
economic indicators - a key gauge of US economic performance -
declined 0.8 percent in October after rising a revised 0.1 percent
in September. It marked the third drop in the last four months,
signaling that the world's largest economy is headed for a
recession.
Since April the index, which measures economic performance over the
next three to six months, has dropped 2.4 percent - twice the pace
of the six previous months. The gauges "are now decreasing at rates
last seen in 2001" when the US was last in recession, the board
said.
The blue chip Dow Industrial Average fell 444.99 points, or 5.56
percent, to 7,552.29. The Standard & Poor's 500 Index lost 54.14
points, or 6.71 percent, to 752.44. The technology-heavy Nasdaq
composite index shed 70.30, or 5.07 percent, to 1,316.12.
The US currency rose to 80.20 euro cents from 79.87 euro cents
Thursday. Against the Japanese currency, the dollar fell to 93.93
from 95.95.
The fate of the US automakers also contributed to dragging stocks
down. On Thursday, congressional leaders charged the three ailing US
automakers to present a detailed "path to viability" plan before the
companies can get their hands on a $25-billion emergency loan from
the government.
General Motors Corp, Ford Motor Co and Chrysler LLC have said they
may soon file for bankruptcy if they don't get a government cash
infusion, and warned that the failure of just one of the so-called
Big Three could have disastrous consequences for the US economy.
But efforts to get them emergency funds stalled in Congress this
week as Republicans and some Democrats voiced skepticism that the US
auto industry was really capable of being rescued after a decade of
refusing to modernize and improve fuel efficiency.
The three automakers will have until Dec 2 to come up with a more
detailed plan for what they intend to do with a $25-billion
infusion. Congress may come back into session a week later to
reconsider the issue, Reid said.
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