Stocks slid on Monday in a broad sell-off as a record $61.7 billion quarterly loss at embattled insurer American International Group
The Dow Jones industrial average fell to its lowest since May 1997 on an intraday basis, hit by selling in financial, energy and industrial stocks.
Among financials, Goldman Sachs
Investors also pummeled shares of big manufacturers, with 3M Co
I think what's really overhanging the market is AIG -- we gave them all that money and they are obviously still bleeding terribly. They are mortally wounded, said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas.
Obviously things are getting bad and they are steadily getting worse. The worst is yet to come.
The Dow Jones industrial average <.DJI> fell 179.77 points, or 2.55 percent, to 6,883.16. The Standard & Poor's 500 Index <.SPX> was down 20.28 points, or 2.76 percent, at 714.81. The Nasdaq Composite Index <.IXIC> slid 29.28 points, or 2.13 percent, to 1,348.56.
Wall Street extended a global stock market rout that slammed stock markets around the world, with European benchmark indexes <.FTEU3> down nearly 5 percent.
Adding to the gloom were comments by billionaire investor Warren Buffett who said the economy will be in shambles throughout 2009.
Since the start of 2009 the Dow is now off 21.3 percent, while the S&P 500 is off 20.5 pct. Since the market's October 2007 record high, the Dow Jones Wilshire 5000 index <.DWCF> -- one of the broadest measures of U.S. stocks -- is down more than 50 percent or about $10 trillion.
On the economic front, data pointed to more damage in the economy. A report from the Institute for Supply Management showed manufacturing continued to contract in February, albeit at a slower rate than expected.
(The ISM data was) a little better than expected but that's the difference between saying you are donating pints of blood or quarts of blood, said David Sowerby, market strategist for Loomis Sayles in Detroit.
Energy shares were among the top drags on the Dow as oil prices slid nearly 9 percent to $40.75 a barrel. Exxon Mobil
AIG, which received $150 billion in U.S. taxpayer aid last year, will gain access to an additional $30 billion under the government's revised rescue plan announced on Monday.
Its fourth-quarter loss was the biggest in U.S. corporate history. Also weighing on markets was news that EU leaders were considered not to have reached any meaningful agreement on a rescue package for eastern Europe.
(Additional reporting by Chuck Mikolajczak and Leah Schnurr; Editing by James Dalgleish)