The major averages sank on the open following a revised fourth quarter GDP to negative 6.2% and the government's plan to increase their stake in Citigroup to 36% diluting current shareholders. The Dow Jones Industrial Average fell 134 points to 7,047 which is a new 13 year low. The S&P 500 Index shed 17 points to 735, a 12 year low, and the Nasdaq Composite dropped 18 points to 1,372, a seven year low. The financials are leading the weakness. Citigroup is down 26%. Investors fear more banks will succumb to the fate of Citigroup. Bank of America is down 12%. Blackstone is down 2% after reporting a $406 million loss. Some banks like JP Morgan are holding up well. The CEO Jamie Dimon believes his bank will hold up well under any stress test. After the first half an hour, the Nasdaq improved. IBM, Google, and Dell are higher. Dell missed sales estimates, but earnings beat due to cost cutting. In the retail sector, Deckers Outdoors is down 19% as their wildly popular Hugg shoes saw sales come back down to Earth. Kohls and Big 5 Sports are lower even though they beat by a penny. The healthcare sector has been walloped in the several days on concerns the government will cut spending on Medicare. Barclays and the Wall Street Journal wrote positive pieces on the sector, but it isn't helping much. After the first hour, the Dow was down just 70 points. The Nasdaq down 3 points. Through the morning the Nasdaq held firm near the unchanged level. The big techs look good. The Dow is working its' way back toward the unchanged level, without any help from the big banks. Citgroup and Bank of America remain weak near the lows of the day. In the afternoon, more dividend cuts. GE slashed their dividend to 10 cents from 31 cents. GE initially bounced, then sold off, then bounced, then sold off again. No dividends are safe. A healthcare provider, Aetna is finally bouncing after initiating a share buyback plan. Heading into the last hour, the averages were holding in there even thought the financials look awful. Scary. In the last hour, the averages pushed lower closing at the lows of the day, lows for the month, and lows for the year. Never ending. The Dow Jones Industrial Average finished down 119 points, or 1.7%, at 7,062. The blue-chip index declined 4.1% for the week, 11.7% for the month, and 50% from the highs of 2007. The S&P 500 shed 17 points, or 2.4%, to 735, leaving it with a weekly loss of 4.5% and a monthly hit of 11%. The Nasdaq Composite fell 13 points, or 1%, to finish at 1,377, down 4.4% for the week and 6.7% for February.
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