WASHINGTON – Calm gave way to fear in financial markets Thursday, turning a relatively steady day into a rout that pushed the Dow Jones industrials below 9,000 for the first time in five years. Investors, who had begun the day somewhat optimistic that the government was taking extraordinary steps to contain the financial crisis, turned gloomy under an onslaught of worries about the economy and corporations.
On the anniversary of its closing high, the Dow shed more than 7 percent, or almost 700 points, to 8579.19. The Dow has lost 5,585 points, or 39 percent, since closing at 14,198 a year ago. The S&P 500, which also fell more than 7 percent to 909.92, is off 655 points, or 42 percent, since recording its high of 1,565.15 a year ago.
Shares of General Motors Corp., one of the 30 stocks that make up the Dow, tumbled 28 percent to their lowest since 1950.
Credit also remained clogged. The London Interbank Offered Rate — a key benchmark for the loans banks make to each other so that they can lend to businesses and people — rose, signaling that banks remain hesitant to extend credit out of fear they won’t be paid back. Read More…