Dow Jones Industrial Average closes at lowest level in six years

Friday, February 20, 2009

Logarithmic graph of the Dow from January 2000 through December 2008

The Dow Jones Industrial Average closed at its lowest level in over six years on Thursday, having lost 1.16%, or 89.68 points, bringing it to a level of 7,465.95. It had, at one point, set an intraday bear market low of 7,447.55. It was the lowest ending for the index since October 9, 2002. The Dow has fallen almost fifteen percent since the start of this year.

Two other US indexes also fell today: the Standard & Poor's 500 (S&P) fell by 9.48 points, or 1.20 percent, to 778.94 points. The Nasdaq Composite lost 1.71% or 25.15 points, closing at 1,442.82.

The S&P had seen its fourth consecutive loss on Thursday, its longest losing streak since last October. It has lost almost fourteen percent since the start of 2009.

Dan Cook, the senior market analyst at IG Markets, said that the Dow's descent is worrisome since without that level of support, investors may worry that the markets can fall even further. "It's kind of like if we're walking across a frozen pond. If that ice starts to crack a bit we're going to be very wary," he said.

Other analysts, however, point out that despite the bad news, the stock market had not descended as quickly as it had been in October and November, and volume was low, suggesting a lack of conviction.

"There's not that panic that there was in November," said Paul Nolte, the director of investments at Hinsdale Associates.

Among some of the losers at the stock market today were Citigroup, which fell 13.8% to US$2.51 a share, and Bank of America, which dropped 14% to $3.93.

In other markets, the British FTSE index increased by 0.3%, and Germany's DAX was up by a fifth of a percent.