Since Jan. 1 alone, the Standard & Poor’s 500-stock index, a broad measure of the financial markets, is down more than 9 percent. And the Russell 2000 index, which tracks small companies, is now officially in a bear market, 20 percent below its peak.
A dismal report on manufacturing activity caught investors by surprise on Thursday morning, sending the main indexes into the red after an early stint in positive territory.
The report, from the Federal Reserve, found that Philadelphia-area manufacturers had contracted much more than expected in a January survey, reaching a six-year low. A similar drop in the index occurred in early 2001, just before the onset of the last recession.
The depth of the subprime market (i.e. corporate abuse, fraud, corruption, take your pick) is hitting every part of the market. It seems it is finally upon us.
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