In the final hour Thursday the Dow tumbled down over 675 points. It is now in the lowest level in five years after a major credit ratings agency said it was thinking about cutting its rating on General Motors Corp.
The Standard & Poor’s 500 index also slide down more than 7 percent.
Just a year ago the Dow closed at a record high. It is now 39 percent down, that’s a total of 5,585 points down.
Today’s sloop was due to Standard & Poor’s Ratings Services putting GM and its finance affiliate GMAC LLC under review. The rating of GM may be cut because of weak United States car sales.
“The story is getting to be like that movie Groundhog Day,” said Arthur Hogan, chief market analyst at Jefferies & Co. He pointed to the still-frozen credit markets, and Libor, the bank-to-bank lending rate that remains stubbornly high despite the Fed’s recent rate cut.
“Until that starts coming down, you’ll be hard-pressed to find anyone getting excited about stocks,” Hogan said. “Everything we’re seeing his historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It’s not the kind of history you want to be making.”