Oct 11, 2008 7:28 am US/Eastern
CBS4 Your Money: A Week Of Financial Wild Rides
MIAMI (CBS4) ―
To say this week has been tough on Wall Street would be quite the understatement. Around one year after hitting all-time highs, the Dow Jones Industrial Average has been dropping like a rock.
The freefall began on Monday with a major sell-off. The Dow dropped below 10,000 for the first time in several years amid fears the credit markets were not responding to financial moves that have been made by Congress and other government agencies. The world markets quickly began to follow suit.
On Tuesday, Congress began hearings about the finances and the situation leading up to the government bail out of insurance giant AIG. Company executives were grilled about the finances and evidence also came out of a lavish retreat the executives held after taxpayers were put on the hook for the bail out.
Wednesday, the Federal Reserve and other central banks around the world cut interest rates in a coordinated effort to either stop or slowdown the sell off that was gripping global markets. It had little initial impact, though rate cuts often take up to a year to really show up in the economy.
Thursday, news came out about problems with General Motors. The company's stock took a pounding, dropping to levels not seen in decades. The Dow Jones Industrial Average followed suit, losing record amounts and settling in below 8500.
Friday, Asian markets took a brutal beating with Japan's Nikkei Average dropping by as much as 1,000 points during the trading day. The Dow Jones opened amongst fears of a major drop, and didn't disappoint.
Trading was extremely volatile as the sell-off continued, at one point dropping below 8,000 in early morning trading. The market quickly regained those losses, and just as quickly gave them back during early afternoon trading.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
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