U.S. stocks plunged on Tuesday morning as investors are concerned that the stimulus package would not be enough to revive the economy, Xiinhua reported.
The Dow fell to near the 7,552 closing low from last November before edging up. The S&P 500 dropped below 800 points to the lowest level since November 20. The Nasdaq composite, which has been outperforming the broader market this year, also lost nearly 4 percent.
U.S. President Barack Obama is expected to sign the 787 billion- U.S. dollar stimulus package into law Tuesday. He is also scheduled to announce a plan to help stem mortgage market Wednesday. But investors' enthusiasm has changed into uneasy speculation and the market is waiting to see the real effect of the plans.
Finnancials plunged as investors' worries about the health of banks exacerbated. Citigroup lost 8.88 percent to 3.18 dollars and Bank of America Corp. slid 10.59 percent to 4.98 dollars a share.
Investors are also waiting for the fate of major auto makers General Motors Corp. and Chrysler LLC. Both companies are required to submit plans to the U.S. government on Tuesday to demonstrate how they would restructure and return to profitability. It is reported that the two companies might not be able to finish the plan before the deadline. GM shares fell 12.4 percent to 2.19 dollars.
Meanwhile, the Federal Reserve Bank of New York reported that the Empire State Manufacturing Survey hit a new low of negative 34. 7, suggesting the manufacturing remains weak in the area. Major manufacturers went downward with 3M falling 3.86 percent to 47.51 dollars a share and Caterpillar dropping 6.04 percent to 29.07 dollars a share.
In earnings news, the world's largest retailer Wal-Mart Stores Inc. reported operating earnings of 1.03 dollars per share for the quarter ended January 31, beating analysts' expectations. But it warned that the first quarter results would miss Wall Street expectations.
Oil price dropped 2.74 dollars to 34.77 dollars a barrel on the New York Mercantile Exchange. Energy shares plunged.
The Dow Jones fell 277.65, or 3.54 percent, to 7,572.76. Broader indexes also slumped. The Standard & Poor's 500 index tumbled 34.84, or 4.21 percent, to 792.00; and the Nasdaq slid 60. 26, or 3.93 percent, to 1,474.10.
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