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The investor confidence at its low level has made the stock market sink to its lowest level in 12 years. Washington has been working overtime to restore investor’s confidence by stating that it has plans to revive and rescue the national banks. But the numbers at Wall Street tell the story. The Dow Jones Industrial Average has dropped more than 10 percent during the last one month.
Investors on Monday started on selling spree that sent the Dow down another 250 points to lows not seen in 12 years. The Nasdaq dropped 54 points. Investors are skeptical that the administration's plans will be the right fix for the ravaged financial system.
The Treasury Department has said that starting Wednesday it will begin subjecting about 20 of the nation's largest banks to "stress tests." Any bank that cannot prove it has enough cash to weather an even more serious downturn may face the prospect of direct ownership by the government.
