Stocks Tumble; Retirement Assets Down $2 Trillion

wspa.com offers a rundown of the top economic stories of the day:
NEW YORK (AP) - Wall Street is holding on to steep losses after minutes from the Federal Reserve’s last meeting described a U.S. economy that was slowing considerably and credit markets that were
deteriorating rapidly.
   
The meeting was held September 16th, the day after after the failure of Lehman Brothers. That event that led to the seizing up of the credit markets and, in turn, the government’s 700 billion-dollar financial rescue plan.
   
The central bank’s Open Market Committee found the risks from weaker growth and higher inflation were roughly equal; that was its rationale for leaving rates unchanged.
   
The minutes appeared to have little impact on stock trading. The Dow Jones industrials were down more than 330 points after their release. All the major indexes, including the broader Standard & Poor’s 500 index, were down more than 3 percent as investors had more concerns about the health of financial companies.

Bernanke says economy is in pain
WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke is offering a bleak assessment of the impact of the current financial crisis.
   
In a speech to the National Association of Business Economics, Bernanke says “the outlook for economic growth has worsened.“ He says the financial turmoil is adding to how long we will see a
period of a weakened economy and an increased “risk to economic growth.“
   
While saying the inflation numbers are “very ugly right now,“ Bernanke expects them to moderate over the next several months.

He also admits that the Federal Reserve will “need to consider” whether it should change its stance about holding credit rates steady.
   
Since the Fed halted its aggressive rate cutting program in June, financial and economic conditions have deteriorated and record high energy prices have begun to decline.

Bush says the nation will recover
WASHINGTON (AP) - President Bush says “we are in tough, tough times,“ even as he tries to assure the public that the economy will eventually bounce back.
   
Bush says it will take time to recover from the crisis that has threatened financial markets around the world. In speech at an office supply company in Virginia, Bush told his audience that he wished he could just snap his fingers and “make what happened stop.“ But he says “that’s not the way it works.“
   
Bush has pressed European leaders to coordinate their efforts to ease the financial crisis that is spreading around the globe.

The finance ministers from the so-called G-7 will hold a previously scheduled meeting later this week. The White House says it is also open to the idea of an emergency international leaders’
summit on the economic upheaval.

NEW YORK (AP) - Dow Jones industrials fall more than 300 on continuing anxiety about financial sector.

Official: Retirement Assets Down $2 Trillion
WASHINGTON (AP) - The top congressional budget analyst says pension plans have lost as much as $2 trillion in the past 15 months.
   
Peter Orszag told a House panel on Tuesday that the losses are likely to force many workers to hold off on major purchases and delay their retirements.
   
The panel was investigating how the housing, credit and financial troubles battering the economy have affected retirement savings.
   
More than half the people surveyed in a recent Associated Press-GfK poll said they worry that they will have to work longer because the value of their retirement savings has declined.

Stocks Mixed After Some Gains
NEW YORK (AP) - Stock prices have turned mixed after opening with some initial gains this morning, a day after the market suffered another big drop.

Investors appear to be adopting a wait-and-see approach to the options laid out by the Federal Reserve to inject the credit markets with a dose of confidence.

They seem heartened—but still cautious—after the Fed’s announcement that it plans to buy massive amounts of corporate debt. The goal is to jump-start lending in the markets where many companies turn for short-term loans.

Credit markets are showing some signs of easing.

Fed To Buy Massive Amount Of Short-Term Debt
WASHINGTON (AP) - The Federal Reserve has announced a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit clog that is imperiling the economy.
   
The Federal Reserve said today it will buy “commercial paper,“ a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls.
   
The market for this crucial financing, which relies on investors rather than banks, has virtually dried up.

Futures point to positive opening
NEW YORK (AP) - Wall Street is hoping to recover from yesterday’s huge sell-off, and so far stock futures are up.
   
The Dow finished yesterday under 10,000 for the first time in four years. That could motivate those looking for bargains.
   
Speculation among traders that Wall Street’s pullback had been severe enough to force the Federal Reserve into taking other steps to soothe the markets helped stocks rebound from their lows
yesterday.

Former AIG CEO Greenberg bows out of House hearing
WASHINGTON (AP) - The former CEO of American International Group has canceled his scheduled appearance at a House committee hearing examining the chain of events that led to the government’s 700 billion-dollar bailout of the financial industry.
   
House Oversight and Government Reform Committee spokesman Karen Lightfoot confirmed that Hank Greenberg would not be appearing at today’s hearing but said she did not know the reason. CNBC reported that Greenberg had bowed out because of illness.
   
Greenberg was one of three former AIG CEOs scheduled to testify before the committee. The Federal Reserve rescued AIG with a 85 billion-dollar loan September 16th.

Higher heating costs predicted
WASHINGTON (AP) - The Energy Department says the cost of heating your home this winter will be a lot more expensive, especially for the tens of millions of households that use fuel oil or natural gas.
   
Households that use oil can expect to spend an average of $2,388—or $449 more than last year—for the October-April heating season. Users of natural gas will probably spend on average just over $1,000—or $155 more than last year.
   
The winter outlook released today by the department’s statistical agency predicts the price of heating oil—widely used in the Northeast - will average 60 cents per gallon more than last winter. The cost of electricity and propane is expected to be 10 percent to 11 percent higher.

GM could sell Detroit headquarters to raise cash
DETROIT (AP) - A General Motors official says the automaker could consider selling its downtown Detroit headquarters as part of a way to raise cash, but plans to stay in the towering complex.
   
The Detroit News reports General Motors wants to borrow about 500 million dollars from one or both of Detroit’s pension funds to refinance the Renaissance Center, which it bought earlier this year for 626 million dollars.
   
GM’s executive director of worldwide real estate John Blanchard says talks are preliminary and the automaker is “committed to the city.“ It moved its headquarters from Midtown Detroit in 1996 and initially leased the building.
   
GM earlier announced it was putting assets such as its Hummer truck brand up for sale and could announce more asset sales this quarter.