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The Floor Caves In

The close: The floor gave in

RTGAM

Remember that low point in January, the dip that many observers had hoped would mark the bottom of the S&P 500 during the current stock market turbulence?

Well, it's under threat - again.

The index's lowest close of 1310.5 gave way on Thursday, when it closed at 1304.34, down 29.26 points or 2.2 per cent. The declines were widespread, with 97 per cent of the shares ending the day in negative territory, led by Exxon Mobil Corp., General Electric Co., Citigroup Inc. and Microsoft Corp.This does not bode well for stocks if you put a lot of importance in low closes or you're getting nervous about the downward trend.

After all, what had looked like a solid foundation for a rally just six weeks ago now looks like mushy floor at best, instilling fears of further declines.Some analysts pointed out that it is the intraday low that is more important as a technical benchmark. Looked at that way, the low point for the S&P 500 is 1270. Either way, though, the world's most important stock market index is clearly under siege, at least from a psychological point of view, and that can't feel good.Meanwhile, the Dow Jones industrial average closed at 12,040.39, down 214.60 points or 1.8 per cent - which is just shy of its lowest close in January.In Canada, the S&P/TSX composite index closed at 13,360.44, down 242.88 points or 1.8 per cent.

The Big Banks were the biggest drags on the index, thanks to growing fears about additional writedowns and, in at least one case, concerns about the health of dividends.Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce fell between 3.4 per cent and 4.3 per cent. Bank of Montreal (that would be the one with the troubled-looking dividend) tumbled 6.8 per cent.Copyright 2001 The Globe and Mail