Legal Commentary

Dow Jones Drops 500 Points Today

By Jeralyn

How much is 500 points?

The 504-point fall is the Dow's sixth-largest point drop ever and was the biggest loss for the Dow since the terror attacks of Sept. 11, 2001.

What's next?

Even as investors digested the historic news surrounding Lehman and Merrill Lynch, some were raising concerns about how it could spill over into other parts of the economy. There will be renewed pressure on the Federal Reserve to cut interest rates tomorrow at its scheduled meeting, economists said.

More...

Lehman's bankruptcy could put other major financial institutions at risk, said Bethune. "Suffice to say that further bankruptcies of major financial institutions would be a process that the economy cannot support at this particularly fragile juncture of the business cycle," he said.

Risk-adverse investors are likely to move away from U.S. assets, dragging down the value of the dollar compared with a range of foreign currencies, said Joseph Brusuelas, chief U.S. economist at California-based Merk Investments. Already, Treasury bond prices have surged today. "There is a concern about the basic stability of the market going forward," he said.

Question: Are investments in mutual funds and accounts at other stock brokerage houses at risk? How does one know if it's time to panic and sell?

Update: Hewlett-Packard today announced it will cut 24,600 jobs.

Full post as published by TalkLeft on September 15, 2008 (boomark / email).