An early equity market rally was wiped and major indexes closed down more than 3% as U.S. officials outlined plans to test and backstop the financial sector. The falls in the S&P 500 and Dow Jones industrial average pushed them below the Nov. 21 closing levels, which had marked the previous cycle lows.
Stocks broke down today, with the Dow Jones Industrial Average falling to levels last seen in 1997 and the Standard & Poor's 500 Index breaking below its Nov. 20 closing low.
The Dow closed down 251 points, or 3.4%, to 7,115, its lowest close since May 8, 1997.
The S&P 500 was off 27 points, or 3.5%, to 743. The S&P 500's close was the more bothersome of the two because it was 9 points below its Nov. 20 close of 752.44, as well as its lowest close since April 14, 1997.
The S&P 500's fall may be interpreted as a sell signal and could drive stocks lower still.
The problem is that both the Dow and S&P plunged through key support levels today on huge volume with the decline accelerating into the last half hour of trading - right now it totally looks like there's no structure to the market. With no uptick rule in place (what happened to the Obama discussion of reinstating the uptick rule as soon as he took office?), the shorts are pretty much free to conduct bear raids on the banks and Dow components like GE, which has been absolutely hammered in the last couple of weeks.
In Canada, the TSX fell 307 points, or 3.9%, to 7642 -- the lowest level since 2002.