Nov 19 2008
US Shares Plunge to 5 Year Low
Wall Street dropped more than 5% today, dropping to it’s lowest level for more than five years, as US investors continue to panic.
October consumer prices fell by 1% on the month before - the biggest fall in 61 years and reinforces fears of a rapid slowdown.
Economists believe that this rapid fall in consumer prices has given the US central bank the room it needs to cut interest rates to battle the economic downturn and the Fed is expected to cut its key interest rate to 0.5% in December - it cut it’s rates twice in October down to 1%.
The fate of car makers Ford, GM and Chrysler is also still uncertain, as Chief executives from the three firms have been asking for an urgent $25bn (£16.6bn) bail-out package from the government this week as a “bridge” to help them survive.
Car makers were some of the biggest casualties in the markets today, with GM shares down by 15%.
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