Market Recap - March 2, 2009

The Dow Jones Industrial Average fell below 7,000 for the first time in more than 11 years in another disheartening and depressing day on Wall Street.  The markets were pulled down by continued fear of financial companies and more uncertainty about the deepening recession.  The Dow Jones fell 299.64 points (4.24%) and the S&P 500 also plunged 34.27 points (4.66%).

The biggest news of the day came from insurance company American International Group (AIG), as the company posted an unbelievably huge $61.7 billion quarterly loss.  AIG will receive another $30 billion bailout loan from the government, but investors wondered whether that would even be enough. 

With this news about AIG and rumors still floating around about Citigroup (C) becoming nationalized, many investors feel like they underestimated how problematic our financial sectors actually were.  With this new realization of how bad things actually are, the sell-offs will continue. 

Warren Buffet also posted a letter to investors over the weekend telling Berkshire Hathaway (BRK-A) investors that the company had its worst year ever in 2008, and that he expects that economy to remain in “shambles” in 2009 and probably beyond. 

How low can the markets go? Will the Dow break 6,000 soon?  Have we reached a bottom in the stock market? These are all very legitimate questions, but the markets are so volatile and unpredictable these days, that the only way to find out is to wait and watch.

Until tomorrow,

Niki Pezeshki

College Trillionaire