The Virginia Business Stock Index drops 8 percent in two weeks
- September 15, 2008
The Virginia Business Stock Index was down 8.32 percent from Aug. 29 as of noon Monday, compared with a 3.44 percent decrease in the Dow Jones industrial average.
Virginia Business tracks stock prices of the state’s 50 largest public companies each month in its magazine. Trade Trends Inc., which calculates the Virginia Business Stock Index monthly, recalculated it on Monday to see how the index was doing in the wake of the weekend’s tumultuous financial news.
The index also performed worse than the S&P 500 Index, which dropped 4.64 percent from Aug. 29, and the Nasdaq Composite, which dropped 5.96 percent. Out of the index’s 50 companies, 41 have seen their stock prices decline since Aug. 29.
The U.S. market was thrown into turmoil Monday after Lehman Brothers filed for bankruptcy, Merrill Lynch agreed to be bought by Bank of America, and AIG sought $40 billion in emergency funds to avoid a downgrading by credit agencies.
Part of the Virginia Business Stock Index’s steep drop partly can be attributed to the government takeover of McLean-based Freddie Mac, whose stock price plunged to less than a dollar after the bailout. Coal miner Alpha Natural Resources in Abingdon has seen its stock price drop 37 percent since Aug. 29. Coal companies have seen their stock prices drop as investors worry about the effect of the weak U.S. dollar and economy on coal prices.