The New York Times, Washington Post, and Los Angeles Timeslead with, and the Wall Street Journal devotes much of its Page One space to, the worldwide plunge in stock markets yesterday. It all started in China, where stock prices fell almost 9 percent, causing a ripple effect as markets opened in Europe and then the Americas. By the end of the trading day yesterday, the Dow Jones industrial average was down 3.3 percent, or 416 points. In terms of percentage, it was the worst decline since March 2003, and in points it was the steepest drop since the first day of trading after the Sept. 11 attacks.
USA Todayleads with an early look at a new survey of homelessness by the Department of Housing and Urban Development that says 704,000 people across the country sought shelter at least once in a three-month period. Because the count doesn't include those living on the street, the actual number of homeless would be higher. Families with children accounted for one-third of the total.
As these things usually go, no one is really sure why the Chinese market plummeted in the first place, but the most probable culprit seems to be rumors that the government was getting ready to pass measures to restrain the fast-growing market. In the United States, besides the news from China, markets were also likely affected by a report that showed a bigger-than-expected drop in orders for durable goods and word that homeowners are defaulting on their loans at high rates. And, oh yes, Alan Greenspan also warned on Monday that the U.S. economy could fall into a recession later this year. Everyone notes yesterday's events illustrate how markets are increasingly globalized (the WSJ has a good graphic that shows how different countries were affected). Chinese stock prices rose today, but European and Asian markets continued to fall.
Despite the breathless coverage, some analysts had been saying for weeks that the market was overdue for some sort of correction. For months, markets around the world have been shooting up with seemingly no end in sight. Some say that many probably used the news from China as an excuse to sell. The WSJ says yesterday's events may signal that "investors may finally be re-evaluating their insatiable appetite for risky investments."
Things went from looking bad to almost nightmarish at around 3 p.m. yesterday when a computer glitch caused the Dow to lag on reporting trades. When it caught up, the Dow seemingly registered one of its fastest declines in history, plunging 200 points "almost instantaneously."
Both USAT and the WSJ dedicate stories to the power Alan Greenspan still holds more than a year after leaving the Federal Reserve. Although his comments didn't have an immediate effect, they did seem to contribute to yesterday's plunge. "Somehow, he's still the maestro," said one analyst. When he retired, Greenspan said he wouldn't comment on his successor's monetary policy. In an interview with the WSJ he insists he has kept his word and talks only about "the global forces that are functioning."
The LAT, NYT, and WP front, while the WSJ tops its world-wide newsbox with, news that the Bush administration has agreed to join high-level talks with Iran and Syria about the future of Iraq. Secretary of State Condoleezza Rice said yesterday that participation in the talks that are being organized by Iraq is part of a new "diplomatic offensive." The U.S. ambassador to Iraq will attend the first one in Baghdad and Rice is expected to be at the second. All permanent Security Council members and G-8 countries will be invited. This is a shift for an administration that has long resisted holding talks with Syria and Iran. Although officials insist the talks will strictly be about Iraq, some weren't willing to rule out the possibility of bilateral discussions. The meetings "could crack open a door to a diplomatic channel," says the NYT.
Meanwhile, in Baghdad, U.S. and Iraqi soldiers carried out a pre-dawn raid in the Shiite district of Sadr City and arrested 16 leaders of the Mahdi Army, which is controlled by cleric Muqtada Sadr. Until now, officials have been reluctant to go into Sadr City out of fear that it would galvanize militia members, who have been lying low recently. It is unclear whether yesterday's raid means there will be more operations in Sadr City. There was also widespread confusion in Iraq yesterday over reports that a bomb exploded near a soccer field and killed anywhere from 15 to 18 children. A spokeswoman for the U.S. military said it had received no reports of the attack.
The U.S. military announced that four more American service members were killed in Iraq.
The WP fronts news of a study that says more than one-third of women are infected with human papillomavirus by the time they are 24 years old. This is about two-thirds more than an earlier, and less comprehensive, study had found. There has been some controversy lately about whether states should be mandating HPV vaccinations.
In another report that makes the inside pages of most papers, an analysis of 68 studies concluded that antioxidant pills, which includes popular vitamins, have no real health benefits and some could even increase the possibility of death.
Back to China's stock market … To illustrate the "recent irrational exuberance" that has surrounded China's stock market over the last year, the NYT says that whenever a company in China announced bad news, its stock increased. Information is hard to come by, and regular people, who often refer to the market as "the slot machine," take any information they can get. So, even if the news is that a company's director is being investigated for fraud, its stock increases.