Pat Dollard

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You know, nothing started going bad until it became more and more likely that Obama would be President.

Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points.

The Dow Jones industrial average fell 332.13, or 4.01 percent, to 7,949.09, its lowest close since Nov. 20, when the blue chips ended at 7,552.29 — their lowest point in more than five years. It was also the blue chips’ biggest drop since Dec. 1.

During much of Obama’s address, the average was down about 150 points. Traders hadn’t appeared so focused on TV screens since Sept. 29, when the House initially voted against the banking bailout package and the Dow tumbled 777 points.

The Dow’s showing was its worst ever for an Inauguration Day. The market slide picked up steam as soon as Obama was finished speaking.

Acknowledging the global economy’s woes, Obama suggested Wall Street would see greater oversight: “Without a watchful eye, the market can spin out of control,” he said in his address outside the Capitol.

Obama warned the economic recovery would be difficult and that the nation must choose “hope over fear, unity of purpose over conflict and discord” to overcome the worst economic crisis since the Great Depression.

The first hours of the new administration did little to ease their concerns.

The collapse in bank stocks was swift Tuesday: State Street Corp. plunged 59 percent, Citigroup fell 20 percent and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.

The shrinking value of bank stocks means the financial industry accounts for less than 10 percent of the Standard & Poor’s 500 index for the first time since 1992. At the end of 2006, banks made up 22 percent of the stock market benchmark.

And the market’s retreat Tuesday means Wall Street has eaten through most of the advance it made from Nov. 20 through Jan. 6. The S&P 500, which had been up as much as 24 percent, is now up only 7 percent from its November low.

Broader stock indicators also fell sharply Tuesday. The Standard & Poor’s 500 index fell 44.90, or 5.28 percent, to 805.22, and the Nasdaq composite index fell 88.47, or 5.78 percent, to 1,440.86.

The Russell 2000 index of smaller companies fell 32.80, or 7.03 percent, to 433.65.

Losing issues outnumbered gainers by about 9 to 1 on the New York Stock Exchange, where volume came to 1.72 billion shares.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.38 percent from 2.34 percent late Friday. The yield on the three-month T-bill, in demand because it is considered one of the safest investments, rose to 0.12 percent from 0.11 percent late Friday.

Light, sweet crude rose $2.23 to settle at $38.74 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices rose.

(AP)