30 Sep 2008

US market plunges

10:27 am on 30 September 2008

Stocks in the United States plummeted in heavy trading on Monday, briefly sending the S&P 500 and Nasdaq down more than 8%, after the US House of Representatives rejected a $US700 billion bailout plan for the financial-sector.

After three hours of debate, the House voted 228-205 against the bill.

"No" votes came from both the Democratic and Republican sides of the aisle: 94 were cast by Democrats.

The House is now adjourned until Thursday.

The Dow Jones industrial average was down 668.57 points, or 6%, at 10,474.56.

Standard & Poor's 500 Index was down 94.08 points, or 7.76%, at 1,118.93. The Nasdaq Composite Index was down 172.55 points, or 7.9%, at 2,010.79.

The Dow set a fresh session low at 10,407.34 - a fall of more than 700 points - its biggest intraday point drop ever.

Volume was heavy on the New York Stock Exchange, where about 2.02 billion shares changed hands - above last year's estimated daily average of roughly 1.90 billion.

About 2.80 billion shares were traded on the Nasdaq - well above last year's daily average of 2.17 billion.

Other markets

Canada's main stock exchange earlier plunged more than 800 points, or 6.88%.

The Toronto Stock Exchange dropped 833.76 points. The exchange is heavily weighted with oil and commodity stocks.

The panic extended to Brazil, where the Sao Paulo stock market plunged 10% and suspended operations. Mexico's Bolsa tumbled 6.2%.

The FTSEurofirst 300 index of leading European shares earlier ended down 5.23% at 1,047.04 points - its lowest closing level since 24 January, 2005. The index is down around 27% this year,

In London, the FTSE index of leading shares lost 5.3% to 4,818.77 points. In Paris, the CAC 40 tumbled 5.04% to 3,953.48 points and in Frankfurt the DAX shed 4.23% at 5,807.08 points.

The New Zealand sharemarket is down 4.5%. At 10:20am on Tuesday, the NZX top 50 index was down 143 points at 3045.

The bailout plan was proposed by the Bush administration on 20 September, amid warnings that urgent action was needed to prevent economic disaster.