Record US stock fall greets Obama

Dow drops four per cent to record worst Inauguration Day showing.

    The Dow has fallen on three-quarters of Inauguration Days but Tuesday's showing was its worst [EPA]

    Multibillion losses reported last week by Bank of America and Citigroup were followed by the Royal Bank of Scotland's (RBS) forecast that its losses for 2008 could top $41.3bn.

    RBS dropped 69 per cent in New York trading while Bank of America lost 29 per cent and Citigroup fell 20 per cent on Tuesday.

    'Watchful eye'

    Obama also indicated that Wall Street would see greater oversight.

    "Without a watchful eye, the market can spin out of control," he said in his address outside the Capitol.

    The Dow Jones industrial average fell 332.13, or 4.01 per cent, to 7,949.09, its lowest close since November 20, when the blue chips ended at 7,552.29 - their lowest point in more than five years.

    While the Dow has fallen on about three-quarters of all Inauguration Days in the US, Tuesday's showing was its worst ever.

    Broader stock indicators also fell sharply, with the Standard & Poor's 500 index falling 5.28 per cent and the Nasdaq composite losing 5.78 per cent.

    Richard Cripps, the chief market strategist for Stifel Nicolaus, said the market's decline was interrupted by Obama's inauguration speech but that the markets then continued to trade on the problems in the financial sector.

    "There's just tremendous fear and uncertainty in the banking sector," he said.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    The War in October: What Happened in 1973?

    The War in October: What Happened in 1973?

    Al Jazeera examines three weeks of war from which both Arabs and Israelis claimed to emerge victorious.