May 10, 2005
GM Bond Hedge Fund Rumor
The Dow Jones Industrial Average and Standard & Poor's 500 index both dropped 1 percent today on rumors regarding allegedly large hedge fund losses. The U.S.-listed stock of Deutsche Bank fell 3.3 percent today on speculation that it suffered investment banking losses in connection with a hedge fund. The rumor on Wall Street is that many hedge funds were overinvested in General Motors bonds, which were downgraded to "junk" status by S&P last week. According to Reuters:
"Regardless of what the (hedge fund) rumors are, today highlights the risks inherent in this market where a lot of money was made because of the easy money the Federal Reserve provided," said Peter Boockvar, equity strategist at Miller Tabak & Co.
Read more: Stocks sink on hedge fund rumors
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