In 2008, Wall Street dropped most since Great Depression

January 1st, 2009 - 10:55 am ICT by IANS  

New York, Jan 1 (DPA) US stocks gained Wednesday as weekly unemployment figures dropped, but Wall Street still saw its steepest yearly slide since the Great Depression.The blue-chip Dow Jones Industrial Average was off 34 percent for the year with the global financial picture looking much different than just a year ago as governments around the world were forced to step in to rescue struggling financial firms and work to unfreeze consumer credit.

The broader Standard & Poor’s 500 Index plummeted 38.5 percent for the year, while the technology heavy Nasdaq Composite Index saw the sharpest drop off, falling 40.5 percent.

Worldwide markets also took a dive in 2008. Germany’s DAX fell 40.4 percent, just shy of its record 44-percent decline in 2002. Japan’s Nikkei Index experienced its worst ever drop, 42 percent.

On Wednesday, the Dow gained 108 points, or 1.25 percent, to 8,776.39, while the S&P 500 jumped 12.61 points, or 1.4 percent, to 903.25. The Nasdaq increased 26.33, or 1.7 percent, to 1,577.03.

Unemployment claims fell by 94,000 this week, the lowest level in two months, Bloomberg financial news reported.

For the year, financial stocks saw the sharpest drops, losing around 60 percent of their value as all four major US investment banks were either swallowed up by larger institutions or were forced to convert to commercial banks. Several banks disappeared from the scene altogether. The once-largest insurer American International

Group (AIG) lost 97 percent of its value to $1.57 this year and was forced to be bailed out by the US government.

Automakers were another dim front on US markets, as the so-called Big Three went begging in Washington for a government loan to keep them afloat. On New Year’s Eve carmakers lost a further 16 percent.

Among the Dow’s top 30 stocks, just two were up for the year as they catered to Americans eager to save money in a slumping economy. Wal-Mart earned 20 percent and McDonald’s gained 8.5 percent.

Still some analysts hope for earnings in 2009 as Wall Street has already trimmed its losses from an all time low in November. The S&P has regained 20 percent of its value since Nov 11, when it was down 49 percent for the year, Bloomberg said.

The US currency gained against the euro Wednesday to 71.63 euro cents from 70.89 euro cents on Tuesday. The dollar also increased against the Japanese currency to 90.67 yen from 90.24 yen.

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