Bangladesh News

Mar 21st
Home arrow News arrow Business News arrow Stocks Fall Sharply on Concern Over Financials
Stocks Fall Sharply on Concern Over Financials PDF Print E-mail
Friday, 12 September 2008

AP, NEW YORK -- Stocks retreated Thursday as investors dumped shares of Lehman Brothers Holdings Inc. and other financial names over worries it is becoming harder for them shore up their balance sheets.

Wall Street's latest unease about the financial sector follows Lehman's announcement Wednesday that it plans to sell its investment management unit and spin off its commercial real estate assets.

The company is seeking to raise cash after making bad bets on holdings tied to real estate.
But traders and analysts appeared unimpressed with the steps outlined by the nation's No. 4 investment bank, punishing the stock in the early going. Citigroup and Goldman Sachs lowered their ratings on the stock to ''hold'' from ''buy.'' Lehman fell $3.01, or 41 percent, to $4.24.
Other financials also logged steep declines as investors worried about the health of balance sheets across Wall Street. American International Group Inc. fell $3.51, or 20 percent, to $13.99 and Washington Mutual Inc. lost 37 cents, or 16 percent, to $1.95. Among other financials, Merrill Lynch & Co. fell $4.09, or 18 percent, to $19.20 and Morgan Stanley declined $2.67, or 6.9 percent, to $36.25.
''The steps they're taking are being seen by Wall Street as too little, too late,'' said Arthur Hogan, chief market analyst at Jefferies & Co., referring to Lehman. ''You're looking at a company that was a $10 billion company last week that is a $3 billion company today.''
''They've got a very tough road ahead of them regardless of whether they get some assets sold off,'' he said.
In midmorning trading, the Dow Jones industrial average fell 84.03, or 0.75 percent, to 11,184.89. but pulled off its lows of the session.
Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 9.91, or 0.80 percent, to 1,222.13, and the Nasdaq composite index slid 10.13, or 0.45 percent, to 2,218.57.
Bond prices rose as stocks pulled back. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.62 percent from 3.63 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell $1.06 to $101.52 on the New York Mercantile Exchange. Investors eyed Hurricane Ike over concerns it could damage energy installations in the Gulf of Mexico.
Investors also faced fresh concerns about consumers after the Labor Department reported that the number of people seeking jobless benefits dropped 6,000 last week to a seasonally adjusted 445,000. Analysts, on average, had expected a reading of 440,000. The four-week moving average rose slightly to 440,000.
The average number of claims remains at a level that some economists say is worrisome. And the report comes a week after the government said the nation's unemployment rate rose to 6.1 percent in August, a five-year high. A shaky job market can be hard on consumers who also face tighter credit and a weak housing market. That worries investors because consumer spending accounts for more than two-thirds of U.S. economic activity.
In other economic news, the Commerce Department said the nation's trade deficit jumped in July to the highest level in 16 months as oil imports reached a new high. That offset strong export growth.
In corporate news, railroad CSX Corp. rose $4.18, or 7.6 percent, to $59.03 after raising its 2008 and long-term financial forecasts.
Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 327.1 million shares.
The Russell 2000 index of smaller companies fell 11.78, 1.64.55 percent, to 705.38.
Overseas, Japan's Nikkei stock average fell 1.98 percent. In afternoon trading, Britain's FTSE 100 fell 1.85 percent, Germany's DAX index fell 1.08 percent, and France's CAC-40 lost 1.53 percent.

Comments Add New
Write comment
  We don't publish your mail. See privacy policy.
Please input the anti-spam code that you can read in the image.
< Prev   Next >