CHESSNOID

Stocks are breaking down and the psychological floor has been broken for the DOW.  We haven’t seen these numbers since 4 years ago.  The bailout has been passed but it look like everyone is dumping their investment holdings.

I was watching a show last Sunday and remember hearing that people will get their 401k statements this month and will not like what they see.  Could it be that  everyone have received those notices last Friday and put the sell order in over the weekend.  Let’s see where the market closes today and if we get a decent bounce tomorrow.  Seems like all the world markets are plummeting too.

The markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash. That’s caused investors to exit stocks and move money into the relative safety of government debt.

Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France’s BNP Paribas agreed to acquire a 75 percent stake in Fortis’s Belgium bank after a government rescue failed.

The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.

The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks’ reserves and will expand its loan program to squeezed banks.

Investors took a bleak view of the future, seeing no end to the crisis in the near term.

“This is a psychologically important moment that we passed below the 10,000 level,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “But, the issues are worldwide. The fact is people are scared and the only thing they’re doing is selling.”

In midmorning trading, the Dow Jones industrial average fell 443.08, or 4.29 percent, to 9,882.30, dropping below 10,000 for the first time since Oct. 29, 2004. At one point, the Dow was down nearly 600.

Broader indexes also tumbled. The Standard & Poor’s 500 index shed 53.12, or 4.83 percent, to 1,046.11; and the Nasdaq composite index fell 101.07, or 5.19 percent, to 1,846.32. The Russell 2000 index of smaller companies dropped 29.31, or 4.73 percent, to 590.09.