US stocks ended a turbulent week by plunging to six-year lows amid concerns over ailing financial institutions and their prospective nationalisation.
The Dow Jones Industrial Average fell a hefty 6.17 percent over the week to its lowest level since October 2002 at 7,365.67 on Friday, dogged by concerns that key banks such as Bank of America and Citigroup will be taken over by the government. The tech-rich Nasdaq composite fell 6.07 percent over the week to 1,441.23 and the broad-market Standard & Poor's 500 tumbled 6.87 percent to 770.05.
The market continued to falter even after President Barack Obama signed a bill for a nearly 800 billion dollar economic stimulus package and unveiled a multibillion dollar plan to contain a home mortgage crisis at the epicenter of global financial turmoil.
Investors zeroed in on the financial stocks amid concerns over bad assets troubling banks and rumours over their nationalisation, which the Obama administration moved to dispel. Unconfirmed reports said that the government may emerge with a firm plan to stabilise the banking sector the coming week.
Larger economic concerns are also expected to dog the market. "It may take quite a bit more policy force to break the back of the recession" that has gripped the United States for the past year, economists at IHS Global Insight wrote.
The government is scheduled to release in the coming week a preliminary Gross Domestic Product projection for the fourth quarter of 2008 - the second update on economic activity for the quarter. Most economists surveyed expect that GDP in the quarter fell 5.4 percent, subsequent to receiving revisions to data after the first reading of negative 3.8 percent.
The GDP decline "is expected to be more severe than previously reported," IHS Global Insight said. Other fresh data to be released next week "will not do much to allay" concerns over the economy, it said. Among others, consumer confidence measures for February as a whole are expected to sink and total new and existing home sales are expected to decline in January, the market analysis firm said.