Investor fear remains deep despite 1-day rally

Even after a late-day rally on Friday, the benchmark Standard & Poor's 500 index has plunged 20 percent since the election. That more than wiped out the index's 18 percent gain in the six trading days ahead of the balloting as optimism grew that Barack Obama would be elected president.

Analysts aren't blaming Obama specifically for the postelection hangover. Rather, they peg it to growing fears that the Bush Administration and Congress are fumbling the $700 billion bailout plan and the weakened economy's impact on financial stocks--highlighted by the plunge in shares of Citigroup Inc. to below $4 a share.

"You can almost hear people yelling, 'Get me out at any price,' " said Al Goodman, chief market strategist at Wachovia Securities. "It's the highest level of fear and depression in my 45 years as a student of the market."

Market experts define a crash as a decline of 20 percent over a single day or several days. Over seven trading days that ended Oct. 9, the Dow lost 22 percent.

This month, the S&P 500 skidded more than 25 percent in the 12 trading days after the election before a bounceback on Friday narrowed the loss to 20 percent.

All told, stocks have lost a stunning $2.6 trillion since Nov. 4, as measured by the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.

The Friday afternoon news that Obama is likely to choose Timothy Geithner, the president of the New York Federal Reserve, to be the next Treasury secretary helped spark a rally that sent the Dow Jones industrial average surging almost 500 points.

Geithner has worked closely with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke this year as the government seized control of mortgage giants Fannie Mae and Freddie Mac and insurer American International Group Inc.

But analysts say it would be a mistake to say Friday's market reversal marks an end to the carnage that has wiped out 45.8 percent of the value of the S&P 500 index since the start of the year.