Wall Street plunges on dim economic outlook

By Xinhua,

New York : Wall Street plunged Monday with the Dow Jones average and the S&P 500 index dropping to a 12 year low on concerns about dim economic outlook.

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Big technology companies like IBM, Hewlett-Packard and Apple declined sharply Monday on worries about a drop in business and consumer spending on technology hurt the tech sector.

Bank stocks rallied Monday as reports said that Citigroup Inc. is in talks with federal officials that may increase the government’s ownership of the bank.

While the discussions could fall apart, the government could wind up holding as much as 40 percent of Citigroup’s common stock. Bank executives hope the stake will be closer to 25 percent.

The Treasury Department, Federal Deposit Insurance Corp., office of the Comptroller of the Currency, office of Thrift Supervision and the Federal Reserve said Monday in a joint statement that they will launch a revamped programme to inject fresh capital into financial institutions this week.

Worries on poor earnings expectations contributed to the sell-off. The Dow Jones industrial average tumbled 250.89 points, or 3.41 percent, to 7,114.78 after hitting 7,105.94, its lowest intraday level since 1997.

The Standard & Poor’s 500 Index was down 26.72 points, or 3.47 percent, to 743.33. The Nasdaq composite index declined 53.51 points, or 3.71 percent, to 1,387.72.