U.S. Stocks Plummet On Global Recession Fears
BIRMINGHAM (WWJ/AP) - Investors on Wall Street and around the world are selling stocks, apparently more convinced than ever that the United States -- and perhaps the globe -- are headed for a new recession. The Dow Jones closed down nearly 400 points on Thursday.
General Motors stocks hit new lows. WWJ and Fox 2 Business Editor Murray Feldman said the problem is still being traced overseas.
"Right now there are new concerns about a lot of European countiries having severe debt problems, hurting their banks because banks are big buyers of government bond," said Feldman. "There is now a concern that they may have a money shortage."
GM stock was down to $20 and change. It's lost nearly 45 percent this year. Ford stock is trading under $10 a share.
Steve Kus, Senior Vice President of Hilliard Lyons in Birmingham, pointed out that this was all happening just one day following the Federal Reserve's statement on the economy.
"There was one sentence in the Fed release that gave concern to the markets and led to that selloff," said Kus. "And then the Chinese numbers on manufacutring overnight, three consecutive months they've slowed, that added to it, and then Germany reported the same thing," he said.
Christine Lagarde, the head of the International Monetary Fund, said the world economy was "entering a dangerous phase." She told an annual meeting of the IMF and World Bank that nations need credible plans to get their debt under control.
So how concerned are Metro Detroiters about the the market?
Steve Hauptman of Southfield has been out of work since early August, but he told WWJ's Sandra McNeil the ups and downs of the Dow don't concern him.
"No ... no, it will go back up," said Hauptman. "I have faith in our government, in our president. You know, I voted for him and I'm gonna vote for him again," he said.
John Holland of Bloomfield Hills, however, is concerned.
"It seems that nothing is being done in order to correct all of this and it's the fault of everybody ... not us, but in Washington," Holland said.
Holland said he's retired and he and his wife are fine, but he worries about those who are out of work as well as the future of his children and grandchildren.
The Dow's lowest close this year is 10,719 on Aug. 10. The Dow has fallen more than 15 percent in two months, since traders began focusing on recession fears and the market was gripped by volatility.
- More on this story from CBS News at this link -
The Associated Press contributed to this report.
