Markets End Week of Volatile Losses

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WASHINGTON - The weekend break was welcome relief to Wall Street investors after ending a week of devastating losses that pummeled stocks to five-year lows.

At opening trading Friday morning, the Dow fell more than 600 points before swinging back and forth again, following a massive dive in Asian markets. Stock losses on Friday were relatively mild at 126 points down, compared to the past seven days of huge drops.

Will the government's financial rescue package work to boost investor confidence? Maya MacGuineas with the Committee for a Responsible Federal Budget explains, following this report.

President Bush urged calm, saying that investor anxiety is feeding the market instability. He called for patience in allowing the government's financial rescue plan to take effect.

"We are a prosperous nation with immense resources and a wide range of tools at our disposal. We can solve this crisis and we will," Bush said in brief remarks from the White House Rose Garden.

Bush urged calm, saying "that anxiety can feed anxiety and that can make it hard to see all that's being done to solve the problem."  He said he understood how Americans could be concerned about their economic future.

The President spoke as leaders of the world's leading economies gathered in Washington to find a way to stabilize markets and end the spreading panic.

"Through these efforts, the world is sending an unmistakable signal. We're in this together and we'll come through this together," Bush said.

Markets Slide

In the opening hour, the Dow dipped below the 8,000 level, following a massive dive in global markets earlier today.  Asian markets plummeted a sickening 9.6 percent drop in Japan alone. The market there has lost almost a quarter of its value in just one week.

Australia's market plunged a record 8.3 percent, with Hong Kong, Singapore and India all down about the same.

In the U.S., analysts are using words usually considered taboo for fear they'll cause a panic.

"When have stocks going down more than two percent a day for seven days in a row? That's a panic and that's a crash," said Art Hogan, chief market strategist with Jefferies & Co.

Liz Ann Sonders with Charles Schwab & Co. agrees.

"We have this sort of mini-crash."

Investor worries were reinforced by Ford and General Motors' stocks tanking Thursday -- with GM reaching its lowest share price since 1950.

President Bush once again addressing the American people today, reassuring them yet again the U.S. is doing all it can to steady a financial system spinning out of control.

The White House says the Treasury Department is going right at the root of the problem -- banks afraid to loan money to just about anybody for anything. That credit freeze is what's threatening to lock up the economy.

But some say Treasury isn't moving fast enough.

"What we have is the $700 billion plan. But none of it has been deployed quite yet. The Secretary of the Treasury said 'I'm hoping to get to it.' And that's one of the reasons we remain frozen up," Art Cashin, trader for UBS Securities.

This weekend Bush meets with top finance officials from the G-7 countries, already in Washington for meetings to coordinate rescue efforts across the globe.

One official was optimistic -- for the outlook a year from now.

"We see that the end of 2009 will be the beginning of the recovery," said.Dominique Strauss-Kahn, a managing director for the International Monetary Fund.

But part of the problem might just be governments coming up with new rescue plans week after week -- moves that reinforce in investors' panicked minds that the situation must really be worthy of panic.

Ironically, as folks flee their stocks, they may be getting out at the worst possible spot -- near the bottom.

The 39 percent plunge the market's taken this past year already exceeds the drop of most bear markets, leading some analysts to think the market could be poised to bounce back soon.

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