Though stocks rebounded nearly 200 points at the start of trading on Tuesday, the Dow's 777.8-point plunge on Monday - the largest single-day drop in more than two decades - sent reverberations throughout the financial community. This came after the House rejected the $700 billion bailout plan, leading to fears that the U.S. economy could be nearing the throws of another depression.
At Monday's close the Dow was down 5.9 percent at 10,365.45; the Nasdaq slipped 2.37 percent to 2,138.81; and the local stock index had the largest decline, down 9.87 percent to 456.72. The price per barrel of crude oil, however, continued its downward trend, closing at $96.37, down 10.82 percent from last week.
As a result of the steep crash of the stock market, credit markets remained distressed, with bank lending rates rising and investors fleeing to the safety of T-bills.
In the local stock index all but two stocks - Kroger Co. and Whole Foods - saw marked declines, with many in the double-digit range, signifying that investors are still confident in companies that sell necessities.
The outlook wasn't nearly as rosy for Zions Bancorporation, which dipped 25.93 percent. But the drop was expected as most regional banks saw declines related to the Wall Street crisis.
Starwood Hotels dropped 19.33 percent to $27.3 - a five-year low - as analysts downgraded the stock to "hold" amid pessimism about business and leisure hotel and travel plans in the dampening economy. Goldman Sachs analyst Steven Kent said that he "expects the hotel industry to remain in negative territory well into 2009," as troubles in the financial sector exacerbate soft travel planes. He also expects that hotel shares "will continue to grind lower in the coming 12 months."
United Airlines and Delta also saw significant decreases, slipping 29.76 and 18.1 percent, respectively. The global credit crunch seemed to be more of a concern that the tumbling price of oil in the airline sector, with all 14 components of the airline index trading down.
