NEW YORK (MarketWatch) — The equities market is reacting to the Obama administration’s latest attempt to stabilize the economy largely as it did the last eight times the government unveiled steps to curb the crisis, beginning in October 2007.
In terms of the S&P 500’s performance, each government action to deal with the financial system’s breakdown and the economy’s decline “was followed by further deterioration, with the exception of the late November announcement after which the market traded sideways,” said Dan Greenhaus, an analyst with the equity strategy group at Miller Tabak & Co.
On Tuesday, equities investors offered a shaky response as the Obama administration started unveiling its plan to shore up the financial system and stem the economic recession. The Dow Jones Industrial Average ($INDU) Dow Jones Industrial Average fell more than 225 points before recovering slightly. The blue-chip index was lately down 169.33 points at 8,101.54.
The S&P 500 ($SPX) fell 20.99 points to 848.9, and the Nasdaq Composite (COMP) dropped 28.03 points to 1,563.53.
“The truth is economic stimulus won’t work if companies and individuals can’t borrow money, and the financial plan won’t work if the economy’s not doing better,” said Hugh Johnson, chairman of Johnson Illington Advisors.
STOCKS ECHO PAST RESPONSES TO GOVERNMENT MOVES By Kate Gibson, MarketWatch, 02/10/09 11:39 A.M., http://www.marketwatch.com/news/story/US-stocks-echo-past-responses/story.aspx?guid=%7b79B51439-3EB1-4EE4-A4BA-DFC16B08FC23%7d&print=true&dist=printMidSection
Someone had better figure out what the heck is going on and fast.