Closing Bell: 08.15.07

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The stock market rose for much of the morning but began a turn downward in the final two hours of trading. The downward movement accelerated, along with trading volume, as the market moved into the closing bell.
The major stock indexes ended the day down. The Dow Jones Industrial average fell 167.45 to 12861.47. This is its lowest close since April 24, and the first time it has closed below 13000 this summer. Today was the fifth down day in a row for the Dow, for a total loss of 800 points in five days.
Nasdaq Composite Index was down 40.29 to 2458.83. Losses in the S&P 500, which dropped 19.84 to 1406.70 today, erased all its gains for the year. It’s now lower than it was at the close of 2006.
Goldman Sachs, Merrill Lynch, Lehman Brothers, Morgan Stanley and Bear Stearns all closed down for the day.
The days true wildness was in the credit markets. First, there was the announcement that the Fed would repurchase debt this morning, and then a glitch held the repurchase up for an hour. The market for high yield debt seems to be less 'frozen' than it was but the market for commercial paper has packed up and moved to the arctic circle. Fannie Mae and Ginny Mae mortgage back bonds guaranteed by the government , also known as agency paper, traded below the level of some corporate bonds.
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