Dow Jones Dives More than 360 Points
MICHELE NORRIS, Host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
Stocks had their worst day in months as the Dow Industrials fell 367 points today. That's 2.6 percent. Investors were reacting to a series of weak earnings reports and to renewed concerns that problems in the credit markets may get worse before getting better. Today's sell-off took place on the 20th anniversary of what's come to be known as Black Monday on Wall Street.
Joining us is NPR's Jim Zarroli in New York. And Jim, I guess in percentage terms, today's decline looks pretty small compared to what happened 20 years ago.
JIM ZARROLI: Yeah, it sure does. It's actually kind of instructive to remember that, too. It maybe keeps what happens on days like this in perspective. If you look back on that day, on October 19th, 1987, the Dow Jones Industrial Average fell 22 percent in a single day. So, you know, obviously, this is not comparable. But, on the other hand, I guess, you know, if you're losing money, you're losing money. And that's - it's not a lot of consolation what happened 20 years ago. And a lot of people lost money today.
Consider all of 30 stocks in the Dow Jones Industrial Average fell. The Dow is down 4.5 percent since October 9th. This was the worse week since July. And it, you know, because it happens right before a weekend, it raises all kinds of questions about where the market is going to go next week.
NORRIS: Now, we said that investors today were reacting to some bad earnings reports. What were some of the companies that are in the most trouble?
ZARROLI: Well, bank stocks are one. Wachovia said its profits last quarter were down 10 percent. Bank of America said some things this week that was similar. We're starting to see the fallout from the mortgage, subprime mortgage crisis really drifting in.
And then, there was a pretty bracing earnings report from Caterpillar, which is the heavy equipment manufacturer. It said its revenues are rising, but only because of its overseas business. In the United States, it said it's seeing severe weaknesses in key markets. Some of the major industries it serves are already in recession.
The CEO said the downturn - the housing downturn in the United States is the worst since World War II. Then, there was also a report from 3M saying its LCD T.V. sales were down. That's kind of a bellwether company. So all in all, some really disturbing reports.
NORRIS: And those disturbing reports taken more broadly, what do they say about the economy right now?
ZARROLI: Well, it suggests what people knew. It's just that things are slowing. It suggests people are scared. They were scared this summer about the credit crunch. But then the Federal Reserve came in and cut interest rates or at least signaled it was going to cut interest rates, and that made everybody feel like the crisis was contained.
Now, you're getting a lot of third quarter earnings reports coming in and some of them look worse than expected. Now, I don't think that most economists right now think we're going into a recession, but I think probably more of them think that now than thought that a few weeks ago.
NORRIS: That's NPR's Jim Zarroli speaking to us from New York. Thank you, Jim.
ZARROLI: You're welcome.
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