Lots of Economic news today!

Stock Market dropped like a brick this AM. Here's why...

From the AP:

Stocks plunge on rising credit anxiety
By TIM PARADIS, AP Business Writer
7 minutes ago

Wall Street plunged in early trading Thursday, yanking the Dow Jones industrials down more than 180 points after a French bank said it was freezing three securities funds that struggled to find liquidity in the U.S. subprime mortgage market.

The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone — institutions, investors, companies, individuals — can't get money when they need it unnerved a stock market that has suffered through weeks of intense volatility triggered by concerns about available credit.

A move by the European Central Bank to provide more cash to money markets intensified Wall Street's angst — although the bank's loan of more than $130 billion in overnight funds to banks at a bargain rate of 4 percent was intended to calm investors, Wall Street saw the step as confirmation of the credit markets' problems.

The Federal Reserve followed suit, adding $12 billion to U.S. markets to help ease liquidity constraints, according to Dow Jones Newswires.

Bonds rose sharply as investors again sought the relative safety of Treasurys, with the yield on the benchmark 10-year note falling to 4.78 percent from 4.89 percent late Wednesday. Bond prices move opposite yields.

Thursday's plunge continued an erratic pattern of triple-digit moves in the Dow for several weeks. There has been more panic and gambling in those moves rather than conviction — even when the Dow has finished up more than 280 points in a session, those gains have evaporated at the first mention of trouble in housing, subprime lending or the credit markets.

In early trading, the Dow fell 185.02, or 1.35 percent, to 13,472.84 after falling more than 200 points.

The Dow on Wednesday finished 2.45 percent below the record close of 14,001.41 reached on July 19. Since passing 14,000, the blue-chip index has been highly volatile — in the 14 trading days since that record close, 10 have seen a triple-digit gain or loss.

Also Thursday, the broader Standard & Poor's 500 index fell 24.25, or 1.62 percent, to 1,473.24, while the Nasdaq composite index lost 28.58, or 1.09 percent, to 2,584.40.

The dollar was mixed against other major currencies, while gold prices fell. Light, sweet crude fell $1.03 to $71.12 per barrel on the New York Mercantile Exchange.

Just heard on CNN: Mutual funds are now affected by the European Bank move.

Stay tuned!