World Markets Tank in Wake of Bailout Passage; Dow Dips Below 10,000

Wow. Investors don't appear to be calmed ...

U.S. stocks plummeted in early trading today as economic turmoil rippled through Europe and investors questioned whether a bailout of the financial sector would be enough to prevent a global recession.

The Dow fell more 500 points mid morning but then retreated to more than 400 points lower by 11:18 a.m. It was the first time since October 2004 that the Dow fell below 10,000. The Nasdaq and Standard & Poor's 500-stock index were both down by 6 percent and by 11:18 a.m. had come back slightly, down 5 percent and 4.7 percent, respectively.

The day started with a negative momentum that has turned into a global panic, said Art Hogan, chief market analyst at Jefferies & Co. "It is just a realization that the global economy is going to be stagnant for the next 12 to 16 months" even with the rescue plan, Hogan said.

European officials are scrambling to bolster financial firms and Asian investors have grown worried that a global recession will undercut their export-dependent economies. Europe has been forced to prop up other banks in recent weeks. Markets in Asia and Europe were down from between 4 and 6 percent.

The price of oil fell as low as $88.89 a barrel in morning trading today, off its peak of $147 a barrel in July. The price of gold jumped as investors sought a safe haven from the market turmoil.

Britain's benchmark stock index, the FTSE 100, lost 220.11 to 4,760.14 _ a 4.42 percent fall. The declines were led by the banking industry, with the mining and oil industries also suffering drops. HBOS PLC's share price dropped 15.7 percent, while the Royal Bank of Scotland Group PLC fell 13.6 percent.

Germany's DAX index fell 4.22 percent to 5,552.27. France's CAC-40 index dropped 4.85 percent to 3,882.81. In Russia, the RTS stock index tumbled more than 7 percent in first 20 minutes of trading.

Across Asia, all markets were also in the red. Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.

Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply. Indonesia's key index plummeted 10 percent, it's biggest one-day drop ever.

In Russia, the RTS stock index tumbled more than 7 percent in first 20 minutes of trading.

"Everyone is losing confidence," said Mark Tan, who helps manage about $20 billion of equities and bonds at UOB Asset Management in Singapore. "The problem now is that the lack of foreign confidence could affect the Asian consumer, which would lead to a bigger slowdown in Asia than expected."

Japanese financial companies and industries dependent on exports, such as steel, were especially hard hit Monday. Nippon Steel Corp. stock tumbled 9.8 percent, while Mizuho Financial Group was down 8.3 percent in morning trading.

Trading in mainland China resumed after a weeklong holiday break with the benchmark Shanghai Composite Index sinking 5.2 percent to 2,173 by midafternoon.

Banks and other financial shares saw heavy declines. Shanghai Pudong Development Bank fell 7 percent and Bank of China slipped 3.6.

Shares of Ping An Insurance Co. rose even after it said Monday it will record a US$2.3 billion loss on its stake in European bank Fortis in the biggest blow yet to a Chinese institution from the global credit crisis. Ping An's shares were up 1.6 percent.