As the banks' bailout hopes sunk Wednesday, so did the market. Treasury
Secretary Henry Paulson reneged on the government's original plan to
direct the $700 billion bailout toward scooping up troubled bank
assets and discussed plans to pump money into nonbanks that provide
consumer credit. The short-term result: The Dow Jones Industrial
Average plummeted 411.30 points to close at 8,282.66 per share.
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The bad news slammed banks big and small, commercial and investment,
regional and national. Morgan Stanley was one of the worse off, sliding
15.20% to close at $11.94 per share. Regional bank Sovereign Bancorp
also took a significant hit, dropping 11.48% to close at $2.16 per
share.
Even news
of U.S. Bancorp's possible growth plans did little to bring its
shareholders' hopes up following Paulson's comments. U.S. Bancorp is on
the hunt for opportunistic large acquisitions, according to a Wall
Street Journal report Wednesday. The bank fell 5.38% to close at
$25.17.
Not all was lost on Wall Street. Phoenix Footwear Group
Inc. soared 20.93% to close at 52 cents per share following an
announcement Wednesday that it had hired BB&T Capital Markets to
explore strategic alternatives, including a sale of the company, as the
consumer spending slowdown continues to drag on retail companies. - Michael Rudnick
