Dow plunges over 777 points on session

Wall Street was down sharply Monday as the US House of Representatives refused to pass a plan to bail out the US financial sector amid partisan recriminations, with the Dow Jones Industrial average losing the most points in a single session in its history.

The Dow dropped 777.68 points on the session, nearly 100 points more than the previous record of 684.81 points, set in the immediate aftermath of the 9/11 terrorist attacks, for a decline of 6.98 percent to 10,365.45.

Still, the percentage decline for the Dow on the day was much less than the 20 percent declines of Black Monday in October 1987 and at the beginning of the Great Depression in 1929.

The Nasdaq Composite was down 9.14 percent to 1,983.73 while the S&P 500 dropped 8.8 percent to 1,106.55.

Banks were lower, led by Wachovia (NYSE: WB), which dropped 81.6 percent on the news that Citigroup (NSYE: C) will buy Wachovia’s banking operations.

At the same time, Citigroup (NYSE: C) fell 11.91 percent on the session.

Media companies saw major declines on earnings uncertainties, with the biggest declines for News Corp (NYSE: NWS), which was down 8.91 percent while Walt Disney (NYSE: DIS) and Time Warner (NYSE: TWX) each dropping 9.22 percent.

European equities markets saw significant declines after three banks in the region received bailouts of various sorts, including a government takeover of UK mortgage lender Bradford & Bingley (LSE: BB), a bailout for Belgian financial group Fortis (EuronextAMS; FOR A; EurnextBRU: FORB; LuxSE: FOR) from Belgium, the Netherlands and Luxembourg, and extension of a guaranteed credit line to Hypo Real Estate (FWB: HRX) by the German government and several private banks.

Several Banks in the region had declines of more than 20 percent, including Anglo Irish Bank (ISEQ: ANGL; LSE: ANGL; FWB: CKL) with a decline of 46 percent while Dexia (Euronext: DX) dropped 28.5 percent and Deutsche Postbank (FWB: DBP) fell 26.65 percent.

Fortis dropped 17 percent on the bailout news.

In London, the FTSE 100 was down 5.3 percent to 4,181.77 while the FTSE 250 dropped 5.82 percent to 7,792.93.

UK banks declined on the Bradford & Bingley news, with Standard Chartered (LSE: STAN; SEHK: 2888) down 11.07 percent as Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) fell 12.98 percent, Lloyds TSB (LSE: LLOY) was 13.45 percent lower and HBOS (LSE: HBOS) dropped 18.06 percent.

Miners were lower on declines in metals prices, including a decline of 14.62 percent for Lonmin (LSE: LMI) while Xstrata (LSE: XTA) dropped 17.47 percent, while other big decliners in London included house builder Taylor Wimpey (LSE: TW), which fell 16.86 percent and pubs owner Punch Taverns (LSE: PUB), which dropped 22.19 percent.

The FTSE Eurofirst 300 was down 5.23 percent to 1,047.04 while the IBEX was 3.88 percent to 10,945.7, the Dax fell 4.23 percent to 5,807.08 and the CAC-40 dropped 5.04 percent to 3,953.48.

Banco Santander (IBEX-35: SAN; LSE: BNC; NYSE: STD) was down 3.7 percent on news that it will buy the deposits and branches of Bradford & Bingley, while Commerzbank (FWB: CBK) dropped 23.14 percent in Germany even though it insisted it is in good shape.

In the semiconductors sector, Infineon (FWB: IFX; NYSE: IFX) was down 25.92 percent while in the steel sector ThyssenKrupp (FWB: TKA; LSE: THK) fell 10.82 percent and ArcelorMittal (Euronext: MT; NYSE: MT; BMAD: MTS; LuxSE: MT) dropped 12.25 percent.

Equities markets in the Asia-Pacific region were lower Monday on fears that even if the US bailout plan for its financial sector that was agreed over the weekend gains Congressional approval, it will not put an end to bank failures.

These concerns were emphasized after the takeover of Bradford & Bingley, the bailout of Fortis, and after Hypo Real Estate’s loan guarnatee.

In Tokyo, the Nikkei 225 was down 1.26 percent to 11,743.61 while the Topix index fell 1.74 percent to 1,127.87 and the Mothers market of small and mid-caps dropped 3.41 percent to 412.71.

Banks were down after early gains on the news that US lawmakers had reached an agreement on a bailout plan for the US financial sector, to be voted on as early as today, with Mizuho Financial (TYO: 8411; NYSE: MFG) down 1.5 percent as Sumitomo Mitsui (TYO: 8316) fell 1.6 percent and Resona Holdings (TYO: 8308) dropped 2.3 percent.

Shippers were lower on declines in cargo rates, with Mitsui OSK (TYO: 9104), Kawasaki Kisen Kaisha (TYO: 9107) and Nippon Yusen (TYO: 9101) all down by 6 percent or more.

The biggest decliner on the Nikkei was Isuzu Motors (TYO: 7202), which dropped 10 percent on a Goldman Sachs downgrade from “buy” to “neutral”.

The retail and food sectors saw gains, however, as investors decided that they were relatively safe from credit market problems.

Fast Retailing (TYO: 9983) was up 5.1 percent while convenience store chain Family Mart Co. (TYO: 8028) added 6.8 percent and soy sauce maker Kikkoman (TYO: 2801) was up 4.5 percent.

Elsewhere in the region, the Shanghai Composite was down 0.16 percent to 2,293.78 and the Kospi was 1.35 percent lower to 1,456.36 while in Australia the Sydney Ordinaries dropped 1.93 percent to 4,839.2 and the S&P/ASX200 fell 1.99 percent to 4,807.4.

Among the biggest decliners in Australia were miners BHP Billiton (ASX: BHP; LSE: BLT; NYSE: BHP), which fell 4.5 percent while Rio Tinto (ASX: RIO; LSE: RIO; NYSE: RTP) dropped 5.5 percent.

The Straits Times Index was down 2.08 percent to 2,361.34, the Taiex fell 2.16 percent to 5,929.63, the Sensex was 3.87 percent lower to 12,595.75 and the Hang Seng dropped 4.29 percent to 17,880.68.

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