Dow Jones hits new low

Copied and Pasted By Xavier Guerrero

Investor worries about the economy in general, and financial companies in particular, continued to erode the markets on Monday as the Dow Jones industrial average fell below 7,000 for first time since October 1997.

Investors expressed concern about the ability of banks to raise more capital, after the British bank, HSBC Holdings, offered new shares at a substantial discount. HSBC Holdings, the global British bank, fell 18.7 percent after the bank said it would seek to raise nearly $18 billion in capital from shareholders and shut down its American consumer lending business.

Washington also agreed on Monday to provide another $30 billion to the insurance giant, American International Group, which also reported a $61.7 billion loss. On Friday, Washington took a larger stake in Citigroup, reducing the value of shareholders’ stock.

“Another day, another 200 points,” David Dietze, chief investment strategist at Point View Financial Services, said, comparing the daily markets to water torture.

The decision by many companies to trim dividends — one of the remaining incentives for owning stocks — was contributing to the sell-off, Mr. Dietze said. Earlier Monday, the large regional bank PNC Financial Services Group cut its dividend 85 percent and the International Paper Company cut its by 90 percent. Last week, the General Electric cut its dividend 68 percent, and JPMorgan Chase reduced its dividend 87 percent.

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Sources:

http://www.nytimes.com/2009/03/03/business/worldbusiness/03markets.html?_r=1&hp
Times.com