Suddenly, Blue Chips Are Penny Stocks

America's once-mightiest stocks have been humbled. Blue chips such as Citigroup, GE, and GM are trading at laughable levels, with Citgroup shares even going under a dollar yesterday. Analysts offer two main reasons for the troubles of big companies: they relied on offering financing to customers, which killed them in the credit crunch, and they are increasingly exposed to the global markets, the Washington Post reports.

Once, investors viewed these companies as safe portfolio cornerstones that were “too big to fail.” Now? “The reality is that size doesn't seem to matter much,” said one researcher. The theory that companies with a global reach were safer now looks like a “myth, right up there with the tooth fairy,” said a Citigroup strategist. And the selling probably isn’t over. “Ninety-nine percent of people I talk to are pessimistic,” said one consultant. “Everyone is sitting back and waiting for one more big implosion.” (More stock market stories.)