Stock market still falling despite Fed plan

Updated

Looks like this will be another rough day in the stock market. Yesterday, the Dow Jones Industrial Average closed below 10,000 points for the first time since 2004. After a brief rally yesterday afternoon, the Dow is still falling today — as of around 9:45am Pacific time, it was down another 1.46 percent, to 9,810 points. The Nasdaq, meanwhile, has dropped 2.41 percent to around 1,818.

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A quick glance at high-profile tech stocks shows they’re still dropping as well. Google is down more than 5 percent, to $350, less than half its 52-week high of $747. Apple is down around 4 percent. Microsoft is down 3 percent.

Earlier today, the Federal Reserve announced a plan to buy massive amounts of the short-term financing mechanism known as “commercial paper”; the Fed said it should serve as a “backstop,” giving companies a new way to raise funds in a virtually frozen credit market. The news led to an initial stock boost, but the market quickly lost those gains and kept falling. The Wall Street Journal’s Peter McKay writes that the market is behaving “much as it did prior to the eruption of crisis on Wall Street last month.” In other words, stocks are falling “gradually, rather than precipitously.”

Update: And the market kept falling. At today’s close, the Dow was down 5.11 percent, at 9,447, while Nasdaq was down 5.8 percent at 1,755. That doesn’t quite match the tumble we saw a week ago, but it’s hardly good news. The chart below has been updated as well.

[Chart and data from Google Finance, image from Calvin and Hobbes by Bill Watterson]