Stocks Slammed After FOMC Downgrades Its GDP and Employment Estimates

The DOW and S&P made new closing lows for the credit crisis on Thursday after the Federal Reserve said the economy could contract through the first half of 2009. Also, the Labor Department said earlier that prices in October declined the most since 1947 while the Census Bureau said housing starts and building permits fell to their lowest-ever annual pace last month.

At the close of floor trading on the NYSE, the DOW was on 7997.28 after falling 427.47 points (-5.07%). It did manage to stay above the low for the credit crisis made Oct. 10 on 7884.80. The last time the Dow ended below 8,000 was in March 2003. The S&P, which is headed for its worst year since 1931, closed on 806.81, down 52.51 points (-6.11%) while the NASDAQ finished the day's trading on 1386.42 with a loss of 96.85 points (-6.53%). Bonds were bought heavily as stocks were sold. The yield on the 2-year note fell 5.7 basis points to 1.072% while yield on the 10-year note lost 16.5 basis points to 3.358%. Three month T-bills lost 5.1 basis points to yield just 0.06%. The dollar traded in risk-aversion mode, with gains of 0.65% on the euro, 0.33% on the pound and 1.87% on Australia's dollar while it fell 1.15% against the yen.

NYMEX crude for December delivery was recently trading down $1.39 (-2.56%) to $53.00 per barrel.

COMEX gold for December delivery was recently trading up $2.80 (0.38%) to $735.40 per ounce.

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