Major indices close at or near the day’s lows
Stocks started off this four-day trading week in grim fashion, as sour U.S. manufacturing data did little to ease investor fears that the recession will let up anytime soon. Add to that today’s news that the SEC charged Houston-based Stanford Financial Group with massive alleged fraud involving a multibillion-dollar investment scheme, and today’s potent cocktail sent small caps tumbling 17.05, or 3.80%, to 431.31. The Dow fell 3.25%, while the S&P 500 careened 4.08%. The major indices closed at or near the day’s lows.
For the year, the Russell 2000 (NYSE:IWM) is down 14.13%, while the Dow is down 13.95% and the S&P 500 is down 12.63%.
Manufacturing in New York contracted in February at the fastest pace on record, falling to minus 34.65. Economists expected a reading of minus 24.
General Motors (NYSE:GM) and Chrysler were in a race to finish restructuring plans to present to the federal government today but seemed unlikely to complete deals with debtholders and union workers by the government-imposed deadline. The companies planned to submit the details to the Obama administration to illustrate that the two battered automakers can return to profitability. At the close, shares of GM were down a dizzying 13.6% to $2.16. The proposal is still being hammered out.
Today gold reigned supreme, hitting a seven-month high on economic concerns fueled by the weak manufacturing data. Gold rose to $966 per ounce, and briefly touched $971 per ounce during afternoon trading. Small-cap gold companies enjoying solid rises today included Royal Gold (Nasdaq:RGLD), up 10%; Seabridge Gold (AMEX:SA), up over 7%; and DRDGOLD Ltd. (Nasdaq:DROOY), which climbed a steady 5.5%.
