Volatile stock market, credit woes persist

August 20, 2007

Stocks continued a volatile trading day today as lingering fears over fallout from the troubled U.S. sub-prime mortgage market continued to weigh on investor sentiment. After opening at 13,078.51 points and then dropping below the 13,000 mark, the Dow Jones Industrial Average bounced back in late trading to above 13,100, but on lower volume than the previous trading day in what looked like a cover spike.

But woes persisted as flight to quality continued and the yield on the 3-month U.S. Treasury bill dropped below 2.5% -a 20 year low (U.S. Treasury bills are considered risk-free, as investors bid up the price the yield on the T-bill drops).