“Stocks plunged Thursday, sending the Dow Jones industrial average down 679 points — more than 7 percent — to its lowest level in five years.

The following is an excerpt from an Associated Press Article written by Tim Paradis and posted on Yahoo today: (see original here)

“Stocks plunged Thursday, sending the Dow Jones industrial average down 679 points — more than 7 percent — to its lowest level in five years. Stocks took a nosedive after a major credit-rating agency said it might cut its rating on General Motors and Ford, further rattling investors already fretting over the impact of tight credit on the economy.

The Standard & Poor’s 500 index also fell more than 7 percent.

The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,164.53 on Oct. 9, 2007. It’s the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent. The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

U.S. stock market paper losses totaled $872 billion Thursday and the value of shares over all has tumbled a stunning $8.33 trillion since last year’s high. That’s based on figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies’ stocks and represents almost all stocks traded in America.

Thursday’s sell-off came as Standard & Poor’s Ratings Services put General Motors Corp. and its finance affiliate GMAC LLC under review to see if its rating should be cut. The action means there is a 50 percent chance that S&P will lower GM’s and GMAC’s ratings in the next three months. GM has been struggling with weak car sales in North America.

S&P also put Ford Motor Co. on credit watch negative. The ratings agency said that GM and Ford have adequate liquidity now, but that could change in 2009.

GM, one of the 30 stocks that make up the Dow industrials, fell $2.15, or 31 percent, to $4.76, while Ford fell 58 cents, or 22 percent, to $2.08.

“The story is getting to be like that movie ‘Groundhog Day,'” said Arthur Hogan, chief market analyst at Jefferies & Co. He pointed to the still-frozen credit markets, and Libor, the bank-to-bank lending rate that remains stubbornly high despite interest rate cuts this week by the Federal Reserve and other major central banks.

“Until that starts coming down, you’ll be hard-pressed to find anyone getting excited about stocks,” Hogan said. “Everything we’re seeing is historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It’s not the kind of history you want to be making.”

The Dow ended the day at its lows, finishing down 678.91, or 7.3 percent, at 8,579.19. The blue chips hadn’t closed below the 9,000 level since the June 30, 2003.

The Dow’s tumble in the last seven sessions is its steepest ever in terms of points and the worst percentage decline since a downturn ending Oct. 26, 1987, when the Dow lost 23.8 percent. That sell-off included Black Monday, the Oct. 19, 1987 market crash that saw the Dow fall nearly 23 percent in a single day.

Broader stock indicators also tumbled Thursday. The S&P 500 fell 75.02, or 7.6 percent, to 909.92, while the Nasdaq composite index fell 95.21, or 5.5 percent, to 1,645.12.

The Russell 2000 index of smaller companies fell 47.37, or 8.7 percent, to 499.20.

Securities and Exchange Commission list of Non-short-sellable stocks grew to nearly 900 Friday, including Ford and Chevrolet…the crisis is already worse than anyone is admitting.

The following is from the 23 September New York Times, written by Michael J. De La Merced:

“….The list of companies that regulators are protecting from short-sellers keeps growing, as do the questions surrounding it.

By Monday evening, the number of companies on the list rose to nearly 900, from 799 on Friday, when the Securities and Exchange Commission sought to restrict bearish bets against financial companies to help stabilize the markets.

Nearly every major bank is now included, along with large insurance companies and others. Trading in bank stocks withered on Monday amid uncertainty over the rules and the sweeping bailout that the Bush administration has proposed for financial companies.

But many questions remain. Some analysts — and a few firms initially left off the list — complained that the initial S.E.C. roster was incomplete.

By the weekend, the S.E.C. delegated the task of adding more companies to the initial 799 to financial exchanges like NYSE Euronext and the Nasdaq. On Sunday afternoon, NYSE Euronext, which operates the New York Stock Exchange, sent out an e-mail message to all of its listed members, asking them to submit reasons why they should be given short-selling protection. Companies had to fit one of seven categories of financial firms listed by the S.E.C. Applications were reviewed by NYSE Euronext’s listings division.

Many financial firms that might seem like natural members of the list — banks like Credit Suisse, the money managers AllianceBernstein and Legg Mason and American Express — did not make the cut until Monday. BlackRock, the big investment firm that has done work for the government during several crises this year, was not added until Monday evening.

A few additions seemed a bit more puzzling. Both General Electric and General Motors were added Monday morning, prompting a few jokes from pundits. But the companies argue that they fall under the guidelines set out by the S.E.C.

General Motors, for example, notified the regulator on Friday that it owned the National Motor Bank, a savings and loan that qualifies it for inclusion on the list, according to Julie M. Gibson, a G.M. spokeswoman. The S.E.C. responded and, after a series of talks between the two, added the carmaker to the list by Monday.

By Monday evening, the Ford Motor Company, which also owns a bank, was added to the list.

Yet as others sought to be added, one company chose to remove itself from the list.

The Diamond Hill Investment Group, a small investment manager that is listed on the Nasdaq, said Monday that it opted out of the protection program. When the firm learned on Friday that it was a part of the no-short list, it asked to be removed, according to Rob Dillon, the firm’s chief executive.”

Dow Jones stocks suffer worst June since the Great Depression

Wall Street opens for trading tomorrow after a depressing week of losses that pushed the Dow Jones industrial average to its worst June since the Great Depression. The blue-chip index is at its lowest point since September 2006.

Investors are again contending with a relentless stream of troubling news from record oil prices to renewed concerns over the health of the financial sector.

“I think the market is trying to make a bottom, but the question is: Will it hold there or just crash through?” said Alexander Paris, an economist and market analyst for Barrington Research. “It feels just like the top of the technology bubble in 2000 – you know there’s something wrong, but it is hard to time it.”

The Dow closed Friday at 11,346.51, a loss of 4.2 percent for the week. The Nasdaq composite index finished at 2,315.63, down 3.8 percent. The S&P 500 index ended the week at 1,278.38, a drop of 3.0 percent.

Friday’s 107-point decline in the Dow left the index down 10.2 percent in June and on the brink of a bear market. The Dow has plunged 19.9 percent since setting an all-time high in October. Market experts define a bear market as a drop of at least 20 percent from a recent high.

“We are already in a bear market,” said Peter Kenny, managing director at Knight Equity Markets. “Even the good ships get stranded on the beach when the tide goes out.”