Sell-Off Sinks Markets At Close
A burst of selling in the final minutes of a volatile day of trading left stocks sharply lower yesterday as investors focused more on the deep strains in the economy than on a glimmer of optimism in a surprise gain in new-home sales.</br></br>Trading was light as investors awaited the beginning of the Federal Reserve's two-day meeting today in which the bank's policymaking committee will consider lowering interest rates again to try to head off a prolonged economic slump. The Fed is expected to cut rates tomorrow by a half-percentage point, to 1 percent.</br></br>Stocks got off to a negative start after a massive sell-off overseas, sending the Dow Jones industrial average down 170 points in early trading. The market reversed course on the housing news and on plans that the Treasury would start distributing much-needed money to nine major banks this week.</br></br>After the swift sell-off near the close, the Dow finished down 203.18 points, or 2.4 percent, to 8175.77, its lowest level in 51/2 years. By the end of trading, the Dow had slid more than 400 points from its high during the day. The broader Standard & Poor's 500-stock index lost 27.85 points, or 3.2 percent, to 848.92, while the tech-heavy Nasdaq was down 46.13 points, or 3 percent, to 1505.90.</br></br>As part of the Treasury's plan for bank infusions, 15 banks added their names to the list. Capital One of McLean, for example, will take $3.55 billion from the Treasury.