U.S. stock indices hit an 11-year low on Feb. 23, as stocks continued their sharp decline from the peak of 2007. This chart looks at some key events that helped to drive stocks down over the last 16 months.

U.S. stock indices hit an 11-year low on Feb. 23, as stocks continued their sharp decline from the peak of 2007. This chart looks at some key events that helped to drive stocks down over the last 16 months. Warning: This may cause post-traumatic flashbacks in some investors.

1 - Oct. 9 2007
U.S. stocks rose to record highs on speculation the Federal Reserve was on course to cut borrowing costs further to revive economic growth. The Dow Jones industrial average climbed 120.80 points, or 0.86 percent, to end at 14,164.53, a record.

2 - Oct. 19 2007
Caterpillar Inc.’s warning that the housing slump was infecting the wider economy sent U.S. stocks tumbling by the most in more than two months, in a drop that was made more unnerving as it marked the 20th anniversary of the 1987 market crash.

The Dow fell 366.94 points, or 2.64%, to end at 13,522.02.

3 - Feb. 5, 2008
U.S. stocks suffered their biggest drop in nearly a year after the Institute for Supply Management’s non-manufacturing index data showed the worst monthly contraction in the services sector since the last U.S. recession and Standard & Poor’s warned it could cut bank credit ratings.

The Dow had its biggest drop since the indicator was created in 1997, down 370.03 points, or 2.93 percent. Settling at 12,265.13, the index was at its lowest level since October 2001, aggravating fears that a recession was at hand.

4 - June 6, 2008
U.S. stocks extended losses as surging oil prices fueled inflation fears, adding to concerns sparked by a government report that showed the unemployment rate had its sharpest rise in 22 years in May.

The Dow fell 3.13 percent to close at 12,209.81

5 - Sept. 29, 2008
Stocks tumbled after the U.S. House of Representatives voted against a compromise bailout plan that would have let the Treasury Department buy toxic assets from struggling banks. House Republicans, in particular, balked at spending so much taxpayer money just before the Nov. 4 U.S. elections.

The Dow fell 6.98 percent to 10,365.45 points.

6 - Oct. 15, 2008
Wall Street had its worst day since the 1987 stock market crash, as bleak economic data fed worries that efforts to unlock credit markets might not stave off a severe recession. Federal Reserve Chairman Ben Bernanke added to those concerns when he said the economy faced a “significant threat” from paralyzed credit markets.

The Dow fell 7.87 percent to 8,577.91.

7 - Dec. 1, 2008
U.S. bank stocks suffered their biggest one-day decline in the current financial crisis, on expectations a deepening global economic slump would reduce employment, crimp access to credit and spur more writedowns.

The Dow fell 7.7 pct to 8,149.09

- Chris Sanders

The TED spread, or the difference between US Treasury bill and eurodollar interest rates, is an indicator of perceived credit risk in the general economy. US government Treasury bills are considered risk-free while eurodollar borrowing costs, measured by the London interbank offered rate (LIBOR), reflect the credit risk of lending to commercial banks.

When the TED spread increases it is a sign that lenders believe the risk of default on interbank loans is increasing. Interbank lenders therefore demand a higher rate of interest, or accept lower returns on safe investments such as T-bills. When the risk of banks defaults is considered to be decreasing, the TED spread decreases. The TED spread fluctuates over time but has often remained within the range of 10 and 50 basis points (0.1% and 0.5%), at least until 2007. A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.

- Clive McKeef

We’ve seen a heavier-than-usual government hand in the form of interventions and rescues this year to steady credit market turmoil, starting with an emergency interest rate cut last fall by the Federal Reserve. But the overall trend for the stock market has remained down.

Feeling lucky? If you think the government intervention in Fannie and Freddie will impact mortgage rates, wager on your prediction here:

Will the 30-year mortgage rate fall this week after the rescue of Freddie and Fannie?

At this time, the estimated growth rate for the third quarter 2008 stands at 0.8%. On April 1, the estimated growth rate for third quarter 2008 was 17.3%. On July 1, the estimated growth rate was 12.6%.

If the final growth rate for third quarter 2008 is 0.8%, it will mark the first quarter the S&P 500 has recorded earnings growth since the second quarter of 2007 (7.7%).

Since the start of the quarter, most of the decrease in the third quarter 2008 growth rate (to 0.8% from 12.6%) can be attributed to downward estimate revisions in the Financials sector.

At the sector level, the Energy (60%) sector is expecting the highest earnings growth in Q3 2008. The financials (-49%) and Consumer Discretionary (-7%) sectors are expecting the weakest earnings growth.

(Ed’s note: John Butters is director, U.S. earnings for Thomson Reuters Proprietary Research Group. To see the full research on the outlook for third quarter earnings expectations, download the PDF here:

The S&P 500 index plunged into a bear market on July 9 2008 — more than 20 percent below its record high close of 1,565.15 points on Oct. 9, 2007 — after ceding to the pressure of a housing slump, a credit crisis, record-high oil prices and a weakening economy.

The S&P 500 was officially introduced in 1957 but its value has been extrapolated. Since 1929, whenever the index has fallen into a bear market, it has on average shed 29.4 percent of its value for the duration of the slump, which has averaged just over a year.

The S&P 500’s worst bear market occurred in the early years of the Great Depression and stretched from April 10, 1930, to June 1, 1932.

The following is a recap of the previous 10 bear markets for the S&P 500, using “The Stock Traders Almanac 2008″ data:

Asia cemented its status as the 21st Century workshop of the world by exporting the goods global consumers loved at prices that kept falling. Now it’s producing the one thing the world hates — inflation.

Higher prices from the world’s factory floor have major implications for a global economy still reeling from the credit crisis and increasingly dependent on Asian exports.

Read the full story by Kevin Plumberg

Here’s a look at the average daily volume of oil futures on the NYMEX expressed in terms of global consumption of oil. As the chart makes clear, the number of paper barrels traded every day on the NYMEX is now over three times the number of actual barrels consumed every day worldwide. On Friday, as oil surged to a record $139 a barrel, the volume on the NYMEX was over 5.2 times average daily consumption. The chart gives some indication of the boom in oil and commodity futures in general.

Lehman shares closed Tuesday near their lowest in five years. Since the year began, Lehman investors have lost more than $17.7 billion.

Lehman shares have dropped to just above $30, and Wall Street analysts have scaled back their expectations for the stock. Nevertheless, the average analysts’ target price assumes the stock will rebound as much as 85 percent, according to Reuters Estimates.

Wall Street remains decidedly bullish on Lehman shares, despite its drop to near a five-year low and reports it needs to raise capital.

Credit default swaps, which rise as investors lose confidence in companies’ financial condition, have climbed sharply of late, spurred in part by concern Lehman Brothers and other investment banks may need to raise additional capital, according to CDS dealers.

As a rule, women are more pessimistic than men. The pattern has been among the most consistent across years of tracking U.S. consumer sentiment in the Reuters/University of Michigan survey. Since the survey began tracking gender differences in outlook in January 1978, women have shown a higher sentiment reading just twice.

Things changed this month.

The long-term trend continued in May as overall consumer sentiment dropped to a 28-year low. Yet the mood among women improved slightly whereas sentiment for men soured for a fourth consecutive month, dropping to the lowest since 1980 (second graphic above). Moods darkened for men by the biggest margin in nearly three years, since the aftermath of Hurricane Katrina.

What’s behind it? One factor at play is a diverging view of personal financial situations. Women in the survey indicated their situations improved modestly this month from April, albeit from a 27-year low. For men, however, May marked the seventh straight month of worsening finances. In fact, men rated their finances in the worst shape since the survey began tracking the differences between the genders.

T. Boone Pickens told broadcaster CNBC he expected crude oil prices to keeping going up. “I think we’ll get to $150 this year,” he said. Analysts at Birinyi Associates, Inc. today put his projections over the past two years against the movement in the price of oil. They concluded the oil investor’s views shouldn’t be ignored.

1 Was surprised oil went down this much (19 month low) still thinks oil will average $70 in 2007
2 Could exceed $70 in 2007
3 Oil will reach $75 before $55
4 Oil will likely reach $78 this year
5 Says $4.50 gasoline will be possible this summer
6 Oil will average $70 for rest of 2007
7 “No way you can be short oil”
8 Oil may surpass $100 on a geopolitical event and will rise to $80 within 6 months
9 $80 oil could push US into recession
1 0 Oil to retreat before hitting $100
1 1 Oil to hit $100 within a year
1 2 Oil to hit $100 within 6 months
1 3 $100 oil will be routine
1 4 Oil to decline by $10 to $15 in 2nd quarter, which would be to $83
1 5 Oil to stay above $100 in 2nd quarter
1 6 Reversed bet on oil and thinks it will now rise. Covered his short and is now long
1 7 Thinks oil wil rise to $150 by end of 2008
1 8 Thinks oil will go to $150 in 2008

– Graphic courtesy of Birinyi Associates, Inc.