Wall Street seen adding to global rout

[October 10, 2008]  NEW YORK (AP) -- Wall Street appeared headed to a sharply lower open Friday, extending a global sell-off on concerns that even low interest rates won't help end the worsening credit crisis. Dow Jones industrials futures plunged 185 points ahead of the opening bell in New York.

Frozen credit markets and a loss of confidence in the world's financial system have caused the Dow to drop 21 percent in just 10 trading days. The blue chip index plunged 678 points Thursday, and is heading to its worst weekly point drop, and one of its biggest weekly percentage drops, since being created 112 years ago.

Going into Friday's session, losses for the year add up to a staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in the U.S.

Global markets continued the intense selling Friday. European bourses were hammered, with Britain's FTSE-100 down 7.3 percent, German's DAX down 7.7 percent, and France's CAC-40 down 7.5 percent. Asian stock markets plunged, with the Nikkei 225 down 9.6 percent and the Hang Seng lower by 7.2 percent.

A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and the rout in Australian markets caused traders to call it "Black Friday."

Central banks around the world were forced to cut interest rates this week after continuing problems in the credit market triggered concerns that banks will run out of money. Analysts have described the mood on trading floors as panicked, with investors bailing out of stocks on fears there is no end in sight to the financial carnage.

Finance ministers and central bankers from the Group of Seven nations will meet Friday to discuss the economic meltdown. One of the potential remedies expected to be discussed at the meeting in Washington is for governments to guarantee lending between banks.

President Bush is also scheduled to make a statement Friday morning about the financial turmoil. But, words are unlikely to stave off another brutal day, with futures pointing to another volatile session.

Dow futures were down 185, or 2.2 percent, to 8,413 two hours before the market opening. Standard & Poor's index futures fell 20.10, or 2.2 percent, to 892.70. Nasdaq-100 futures declined 4.50, or 0.35 percent, to 1,267.50.

Gold futures climbed $36 to $922.50. Oil prices fell, with a barrel of light sweet crude falling $3.85 to $82.74 a barrel in electronic trading on the New York Mercantile Exchange.

Investors continue to shift money into safer investments, most of it going into the government bond market. The yield on the three-month Treasury bill slipped to 0.50 percent from 0.58 percent late Thursday. That suggests that demand for T-bills, regarded by investors as the safest assets around, remains high.

Longer-term Treasury yields were also in favor. The yield on the benchmark 10-year note fell to 3.73 percent from 3.76 percent late Thursday.

In corporate news, General Electric Co., a bellwether for the U.S. economy, reported that third-quarter profit sunk 22 percent. The Dow component blamed the drop on more losses in its financing business, though earnings for the company met Wall Street projections.

Citigroup Inc. said late Thursday that it was suspending its bid to acquire Wachovia Corp., which in turn will be acquired by Wells Fargo & Co.

[Associated Press; By JOE BEL BRUNO]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.