Late afternoon update: U.S markets tumble more than 500 points; agreement said to be in place to reopen the FAA
Today was not a good day to worry about your 401K account. Let me tell you, you have less money now for retirement. Sorry about that.
The U.S. stock market closed with a thud, losing 512.76 points on the day, or 4.3 percent. Investors were voting with their wallets today, stating that all is not well both here and abroad.
Foreign markets also tumbled badly, with the German DAX down 2.3 percent on the day. But European markets have been taking a beating all week, with the DAX down over 2 percent for the past three days.
But liberal economists have been beating the drum for more stimulus and less austerity, conservatives, and most of Washington has been on the austerity bandwagon. It seems unlikely that that particular train can be turned around.
Was this an historic day for the markets? Not really, at least when you are talking about the Dow’s performance on a percentage basis. (Today’s 512 loss, however, is the 9th largest point loss in market history.)
On a percentage basis, today’s 4 percent drop doesn’t even make it into the top 20 of really bad days for the market. While every has heard of the 1929 crash, it was actually October 19, 1987. For a story about that great crash, the day the market lost 22.61 percent read this post from last week.
The best day ever for the market, percentage wise, came on March 15, 1933, the day the Emergency Banking Act was put into place. That act created the Federal Reserve and effectively ended the bank runs. (I accidentally tweeted that this was the “worst” day in Dow history, what was I thinking?)
Gotta love Wikipedia. Someone has already updated this page to reflect today’s market performance, putting today as the 9th worst point loss in history.
Have a few dollars you need to put away for a short time? How about a one-month Treasury bill? Bloomberg today reported that because bond prices are falling the U.S., reflecting the deteriorating economy, the yield on a one month T-bill is currently negative 0.0102 percent.
That’s right, you don’t get any interest for buying that bill. Of course, yesterday the yield, while in the black, was only 0.0051 percent. Hard to get rich at those rates, huh?
The New York Times is reporting, though it is not their lead story thanks to the Dow, that Senator Harry Reid says that an agreement is now in place to reopen the Federal Aviation Administration (FAA). The federal agency has been unfunded thanks to Congress beating town without an agreement to fund the agency.
As a result, the airlines have had a holiday from paying its fees to the agency, some $30 million per day that the airlines are supposed to collect taxes on flights. Instead, most airlines have raised their fares during the dispute.
4,000 FAA employees have been furloughed while the agency dispute has gone unsolved.
Here is some more good news: the price of oil fell 5 percent today to $87 a barrel. With the the U.S. and Europe’s economies grinding to a halt, oil investors apparently do not see much of a rise in demand in the near term.
Note: this story was updated many times over the past half hour to reflect new information, correct sloppy errors, and include links where none were available previously (we always link, which is more than can be said for those who steal my stories!) My apologies to those who read previously, less complete versions of the afternoon news update.