NEW YORK – Wall Street's March rally is on hold after the White House rejected turnaround plans from General Motors Corp. and Chrysler and gave investors an economic reality check.
Major indexes fell about 3 percent Monday, including the Dow Jones industrial average, which lost about 254 points but finished well off its lows. Financial stocks weighed heavily on the market amid worries that banks will need fresh injections of capital.
Fears of an automaker bankruptcy have been looming over investors for months, and the latest developments, which included the removal of GM's CEO Rick Wagoner, made the market even more uneasy not only about the industry, but the overall economy. However analysts said the pullback, which began with a 148-point drop in the Dow Friday, wasn't surprising after the average surged 21 percent over just 13 days.
"The market had a very significant rally off the lows," said David Katz, chief investment officer at Matrix Asset Advisors. "We think it's just taking a breather."
According to preliminary calculations, the Dow tumbled 254.16, or 3.3 percent, to 7,522.02. The Dow was down as much as 339 points so the market's ability to end off its lows on light trading volume could signal that investors aren't ready to give up on the rally.
The Standard & Poor's 500 index fell 28.41, or 3.5 percent, to 787.53, while the Nasdaq composite index fell 43.40, or 2.8 percent, to 1,510.80.
Despite the two-day retreat, the Dow is still up 975 points, or 14.9 percent, from its low on March 9, when it ended at its worst levels since April 1997. The S&P 500 index is still up 16.4 percent from its low.
Monday, March 30, 2009
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