Stocks sink on bailout jitters, oil's jump
|
|
|
By Ellis MnyanduNEW YORK (Reuters) - Stocks fell on Monday, weighed by uncertainty about how far a proposed $700 billion U.S. financial sector bailout will go in resuscitating the economy and as oil prices resumed their climb.U.S. front-month crude oil jumped $5.01 to $109.63 a barrel as the dollar weakened, sparking concern about the outlook for consumer and business spending.Banks, home builders, retailers, airlines and big manufacturers were among the biggest decliners as negotiations over the mechanics of the plan to mop up bad mortgage debt on banks' balance sheets heated up in Washington.The Bush administration is pressing Congress to approve one of the costliest U.S. bailouts for financial companies since the Great Depression.Shares of JPMorgan Chase , the No 3 U.S. bank, slid 10 percent to $42.33, making the stock the top drag on both the Dow and the S&P 500.Wells Fargo , the fifth-largest U.S. bank, fell 12.2 percent to $34.93. The S&P financial index <.GSPF>declined more than 6 percent."There is lingering uncertainty about the overall economy despite the moves to shore up the financial markets," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles."Clearly the weakness in the financial markets has been part of the drag on the economy in the first nine months, but it has not been the only drag. Merely shoring up the weak financial markets is not necessarily a salve to the overall economy's problems."The Dow Jones industrial average <.DJI> fell 210.51 points, or 1.85 percent, to 11,177.93. The Standard & Poor's 500 Index <.SPX> declined 27.42 points, or 2.18 percent, to 1,227.66. The Nasdaq Composite Index <.IXIC> fell 49.94 points, or 2.20 percent, to 2,223.96.Members of Congress have called for changes to the bailout plan announced by U.S. Treasury Secretary Henry Paulson on Friday, when stocks rallied.Uncertainty about the bailout overshadowed news that Mitsubishi UFJ Financial Group <8306.T> Japan's largest bank planned to buy a stake in Wall Street bank Morgan Stanley .Goldman Sachs and Morgan Stanley , whose shares were battered last week amid worries about their outlooks, are abandoning their investment bank model of two decades to become bank holding companies.Morgan Stanley shares shot up 9.5 percent to $29.80, but Goldman Sachs shares were little changed, up just 0.1 percent, at $129.97.As rising oil prices are likely to hurt consumers, investors sold off shares of consumer-oriented companies, including Procter & Gamble , down 2.6 percent at $68.50. Shares of Target Corp , the No. 2 U.S. discount retailer, dropped 4.6 percent to $50.90 after Lazard Capital Markets cut the stock to "hold" from buy."Among home builders, shares of Hovnanian Enterprises declined 5.4 percent to $8.56, as the Dow Jones U.S. home construction index <.DJUSHB> fell 6.2 percent.Shares of Caterpillar Inc , an economic bellwether and a Dow component, lost 1.7 percent to $65.34.Kraft Foods Inc , a new member of the 30 Dow industrials, effective at Monday's opening bell, also dropped 3.4 percent to $33.49.On Nasdaq, shares of Apple fell 2.9 percent to $136.80 after JPMorgan cut its price target on the iPod and iPhone maker's stock.(Additional reporting by Kristina Cooke; Editing by Jan Paschal) (c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Five more US bank failures bring total for 2009 to 120 New York - Bank failures in the United States have risen to 120 this year as five more regional institutions were added to the list, the US agency that guarantees the safety of bank deposits said. United Commercial Bank in San Francisco with assets o...
US stocks climb slightly despite double-digit jobless rate New York - US stocks posted mild gains Friday to end the week as investors shrugged off government figures that put the unemployment rate above 10 per cent. The Labour Department said the jobless rate hit 10.2 per cent in the month of October, the hi...
US joblessness hits 10.2 per cent, highest in 26 years - Summary Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years as another 190,000 people lost their jobs, the Labour Department reported Friday. The figure comes after a 9.8-per-cent jobless rate in September and wa...
US joblessness jumps to 10.2 per cent, highest since 1983 - Update Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years, as another 190,000 people lost their jobs during the month, the US reported Friday. The figure reported by US Labour Department came after the 9.8 per ...
US jobless rate jumps to 10.2 per cent Washington - The US unemployment rate surged to 10.2 per cent in October as another 190,000 people lost their jobs, according to US Labour Department figures released Friday. The jobless rate stood at 9.8 per cent in September. Unemployment had been ...
Bulls stop James, edge Cavs - Summary Los Angeles - The King couldn't deliver in the clutch. Luol Deng and Joakim Noah combined to deny LeBron James a potential game-winning drive in the final seconds as and the visiting Chicago Bulls snapped the Cleveland Cavaliers' three-game winning...
Mortgage lender Fannie Mae posts nearly 19-billion-dollar loss Washington - US mortgage lender Fannie Mae said Thursday that it would seek 15 billion dollars in federal aid, after posting its ninth consecutive quarterly loss. Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter of 2009, co...
|
|
|
|
|
|
|
|