Dow falls below 7,000 after AIG’s massive loss

March 3rd, 2009 - 2:29 am ICT by IANS  

New York, March 2 (DPA) The Dow Jones Industrial Average fell below 7,000 points for the first time since 1997 in early trading on Wall Street Monday, following stock sell-offs across the globe after American International Group Inc (AIG) reported a $62-billion quarterly loss.
The US’ deepening recession and financial crisis mean the blue-chip Dow has now lost more than half its value since reaching a record high of 14,000 points in October 2007. US stocks had already plunged last week to their lowest level since 1997.

The Dow index lost more than 1.5 percent within a half-hour of opening Monday morning. The broader Standard & Poor’s 500 Index fell 1.6 percent. Stocks in Europe and Japan fell sharply earlier in the day.

AIG reported a loss of $99.3 billion for the whole of 2008, including $61.7 billion in the fourth quarter alone, due to its exposure to the US housing market downturn.

The Treasury said the insurance giant would get another $30 billion in government aid to help avoid bankruptcy, on top of $150 billion already provided to the ailing insurer in the form of loans and guarantees.

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