Nov. 6 Update: Markets See Post-Election JittersAfter the run-up for Tuesday's election, post-election Wall Street showed its nerves about the recession on Wednesday. The recent spate of poor earnings and unemployment figures made for a volatile day, with the Dow Jones Industrial Average falling nearly 500 points and all major indexes dropping more than 5 percent.
Bad news in the financial services industry continued on Wednesday, as Goldman Sachs started notifying 3,200 employees that they have lost their jobs in a plan to cut 10 percent of the investment bank's workforce. The layoffs were announced earlier in October.
On Thursday the European stock markets traded down despite the rate cuts from central banks, including the largest cut Bank of England has made in 27 years. The Bank of England cut its benchmark rate by 1.5 percent to 3.0 percent, the biggest cut since March 1981.
The markets were down around Europe 3 percent or more after heavy selling in Asia. Wall Street also felt more tremors on Thursday, as futures were lower ahead of the market opening, as news on retail sales and increased long-term jobless claims of 3.84 million -- the highest in 25 year -- fueled investors' nagging thoughts of the possibility of a deeper, longer recession than anticipated.
On the mortgage front, JPMorgan Chase, the biggest bank in the U.S. and a big mortgage lender, announced it would temporarily halt foreclosures last Friday, and offered to renegotiate a swathe of mortgages. Earlier this month, Bank of America agreed with 11 state attorneys general to offer relief to nearly 400,000 Countrywide customers with troubled mortgages, resulting in an expected $8.4 billion of interest rate and principal reductions. JPMorgan expects to renegotiate $70 billion of mortgages over two years.