Dow, S&P end at lowest level since 1997

Consumer Reports News: February 23, 2009 04:50 PM

The markets tumbled Monday with major indexes falling to their lowest levels in 12 years.

The Dow Jones industrial average lost 250 points, or 3.4%, according to early tallies, ending at the lowest point since May 7, 1997, and the S&P 500 lost 26 points, or close to 3.5%, ending at the lowest point since April 11, 1997.

Stock prices had climbed earlier in the day after the Wall Street Journal reported that the government was in talks to acquire more of Citigroup, but not to nationalize the troubled bank.

The mood on Wall Street was less than optimistic, according to the AP:

"People left and right are throwing in the towel," said Keith Springer, president of Capital Financial Advisory Services.

Most financial stocks were pounded even as government agencies led by the Treasury Department said they will launch a revamped bank rescue program that includes the option of increasing government ownership in financial institutions without having to pour more taxpayer money into them.

Although the government has said it doesn't want to nationalize banks, many investors are clearly still concerned that this could be a possibility as banks continue to suffer severe losses because of the recession. They're also worried that banks' losses will keep escalating as the recession sends more borrowers into default.

"The biggest thing I see here is the incredible pessimism," Springer said. "The government is doing a lousy job of alleviating fears."

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Dow, S&P end at lowest level since 1997

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