The Dow is down 10% from its mid-August high as analysts said the market is set to collapse below its July lows near 8,000. IT stocks, airlines, banks, and retail stocks plummeted. Citigroup. Goldman Sachs, Merrill Lynch, and other Wall St. houses fell by 2%-4% as Congress widened inquiries into their role in corporate corruption.
On Friday, the Labor Department releases August employment and even these doctored figures are expected to rise, causing more sell-offs.
Bush's threat Wednesday in meetings with Congress to go to war with Iraq is having a negative effect on U.S. markets, rather than propping up the dollar as in prior Mideast wars.
"People are realizing that a further rise in oil prices will worsen the U.S.'s enormous trade and budget deficits, and further deter capital flowing into the United States,"
said one Japanese observer, "and some are calling this the `Bush Crash'." The dollar is at 5-week lows versus the euro and the yen. European and Asian markets reacted to the Dow crash by crashing too.
Source: Frankfurt, NY, Tokyo, Seoul; CBS MarketWatch, Reuters