Major stock indices dropped to new multi-year lows on Thursday as financials, again, and tech stocks weighed on the market. At the close, the Dow Jones Industrial Average had lost 89.68 points to 7,465.95, breaking the November 20, 2008 low. The last time the Dow closed lower was on October 10, 2002 when the blue-chip benchmark was at 7,286.27, the bottom of the last recession after the dot-com bust.
So far in 2009 the Dow has lost 1,310.44 points, or 15%. Since reaching the all-time high of 14,164.53 on October 9, 2007, the Dow has surrendered 6,698.57 points, or 47.3%.
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Despite the passage of the massive economic stimulus package and promises from the government to help millions of homeowners fight foreclosures, investors didn’t gain much confidence from the government’s plan to revive the economy and the housing market. The fact that the Dow dropped below its November low singles that the slump could continue. At the same time, the Labor Department reported today that nearly 5 million Americans now collect unemployment benefits.
Recovery? It won’t come any time soon.