Dow drops 300 points

Just days ago we were telling you about a new record high on Wall Street.
Well, it didn’t last long. Stocks suffered one of their worst losses of the year today as the Dow closed down more than 300 points after sinking even lower during the day.
The final Dow figure was 13,478.

Just last week investors were reveling as the Dow hit an all time high — passing 14,000 for the first time. But it didn’t take long for the market to hit the brakes, then shift into reverse.

On Thursday the Dow industrials had shed more than 430 points in afternoon trading. Market watchers say that the primary cause for the big drop is a tightening in the corporate credit markets. That makes it harder for companies and consumers to borrow money.

Fears of a credit crunch helped drive the sell off.

There was also more bad news about the housing market.

A new Commerce Department report that showed new home sales falling more than three times what analysts had predicted. Poor June sales coupled with horrible earnings posted by the biggest publicly traded home builders also helped drag the market down.

Experts say oil prices played a role, as well. Even though prices were down today, they remain near record highs, which is fueling fears of inflation.

But to put the market fall into perspective, at its lowest point it was about a 3 percent loss, much smaller than the 23 percent drop the markets suffered on Black Monday in 1987.