Global stocks take a tumble

The Baltimore Sun

NEW YORK -Stock markets around the world tumbled yesterday amid deepening concern over the health of the banking industry and doubts about the ability of governments to spur a recovery.

The Dow Jones industrial average sank almost 300 points, closing less than a point above its late-November low.

The broader Standard & Poor's 500 index and Nasdaq composite index fell more sharply but stayed well above their November troughs.

Banking stocks were pounded.

European markets closed down more than 3 percent on average.

There was no single trigger for the sell-off, but the widespread discarding of stocks underscored investor fears about the depth of the recession and the failure of government actions so far to arrest the decline, analysts said.

Shares of General Motors Corp. sank 13 percent on speculation that the company might not be able to avoid filing for bankruptcy.

"The stock market is beginning to fear the economy isn't going to bottom in the next six months and may not bottom in all of 2009," said Douglas Peta, an independent market strategist. "We've gotten a continuing drumbeat of worsening economic data."

Investors also are concerned about the $787 billion economic stimulus bill and fear that it won't be enough to prevent a deepening of the recession. President Barack Obama signed the legislation late in the trading session.

A report showing manufacturing in the New York area falling at its fastest pace on record added to the gloom.

The Dow closed down 297.81 points at 7,552.60, a whisker above its multiyear low of 7,552.29 set Nov. 20.

The S&P; 500 plunged 4.6 percent but remained 4.9 percent above its Nov. 20 low. The Nasdaq lost 4.2 percent, remaining 12 percent above its November nadir.

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