Yesterday wasn’t a very good day for the stock market. Stocks were rising early but after Federal Reserve Chairman Ben Bernanke’s announcement which consisted of very little detail as to what the central bank will do regarding the slow economy sent the stock markets plummeting.

Last night, President Barack Obama proposed his new Stimulus plan which would put $447 billion into the economy in the form of  income tax cuts and new government spending. And today, the stock market drops hundreds of points undoing all the positive we have seen at the end of August and at some parts of September.

This all comes after more bad news coming from Europe, such as a rumor going around about a Greek default as well as a resignation of a European Central Bank official. This takes confidence away from investors all around the world which resulted in the horrible trading day that we are experiencing. The news about Greece actually overpowered what President Obama proposed last night. The stock market should have gone up because the proposal was a step towards pushing the economy to recover faster, but the bad news from Greece made the President’s announcement last night almost insignificant. The proposal was supposed to have put confidence back into investors but instead, it was taken away.

Stocks Dive after news from Greece comes in

By Yahoo! Finance

The Dow Jones today dropped more than 300 points so far, or a 2.75% drop from yesterday. It is currently under the 11,000 mark and if the decline keeps up, we will finish below the 11,000 mark for the first time in weeks. The graph on the right provided by Yahoo! Finance shows the huge decline the Dow has seen so far today.

The NASDAQ Composite dropped more than 60 points or more than 2.5% from yesterday. The  S&P 500 dropped more than 30 points or 2.6% from yesterday. And the NYSE dropped more than 200 points or almost 3% from  yesterday. All of the indexes have seen big drops today, adding onto the negatives we saw all week long (except for Wednesday).

President Barack Obama’s proposal is supposed to get the economy rolling again, but will it be passed? Remember that this has to be approved by Congress and right now, Congress is controlled by the Republicans and they can very well shut down Obama’s stimulus proposal for various reasons.

One of the reasons for the rejection could be the government is spending all over again when they don’t have any money to spare. The $447 billion could be used in other ways, tax cuts may not be the best way to do it. The government is already in trouble with money and more spending could be a huge setback for the country even if it’s to stimulate the economy. We have seen stimulus packages comes out in recent history which were meant to stimulate the economy but they haven’t worked. Some have actually hurt our economy. Some reporters have mentioned that Obama’s proposal had nothing to do with the decline today, but it may have everything to do with it because of past failures.

Another reason for the rejection could be the Republicans just showing their power in congress. They have control and maybe they want to use it. Even though they all want to help out the country, they are still politicians and politicians will always try to outdo other politicians, and this isn’t party specific.

Whatever happens, we very much need the economy to bounce back. And it looks like the first full week of September will end in the negatives. But we still have time! We will have to see where this Stimulus proposal goes and hope that everything works out for the best. I know the economy will bounce back, it’s just happening later than I expected.

What do you guys think has to do with the decline today? Was it Obama’s proposal? Or was it Greece?