Η Bank of America , η μεγαλύτερη Τράπεζα των ΗΠΑ από πλευράς παγίων, έπεσε για πέμπτη συνεχόμενη ημέρα, έχασε που 64 σεντ και κατέβηκε στη χαμηλότερη τιμή 24ετίας στα 3.93 δολάρια. Η Citigroup, που έχει λάβει 52 δις. δολάρια κρατική βοήθεια , έπεσε 40 σεντ , στα 2.51 δολάρια , που είναι η χαμηλότερη από το1992. Ο DOW σε επίπεδα 2002.
U.S. Stocks Decline, Dow Industrials Close at Six-Year Low
By Elizabeth Stanton
Feb. 19 (Bloomberg) -- U.S. stocks dropped, sending the Dow Jones Industrial Average to a six-year low, as Hewlett-Packard Co. cut its profit forecast and concern about rising credit-card defaults dragged financial shares to the lowest level since 1995.
Hewlett-Packard, the world’s largest personal-computer maker, fell 7.9 percent and technology companies were the biggest drag on the Standard & Poor’s 500 Index. Bank of America Corp. and Citigroup Inc. fell 14 percent each to lead the Dow’s retreat. Prudential Financial Inc. slid 16 percent after losing its ability to borrow under a government program because of a credit-rating downgrade.
The S&P 500 slid 1.2 percent to 778.94, extending its 2009 loss to 14 percent in its worst start to a year. The Dow dropped 89.68 points, or 1.2 percent, to 7,465.95, the lowest since October 2002. The Russell 2000 Index declined 1.5 percent.
“The market is trying to digest the severity of the economic slowdown and its effects on tech stocks and capital spending going forward,” said Giri Cherukuri, who helps manage $1.1 billion at Oakbrook Investments in Lisle, Illinois. “People are thinking it’s maybe going to be more severe than expected. That’s going to affect spending for the rest of 2009.”
The S&P 500 fell for a third day yesterday as the Federal Reserve cut its forecast for the U.S. economy this year, while government reports showed industrial production shrank more than forecast and housing starts slid to a record low last month.
Today, a Federal Reserve gauge of manufacturing in the Philadelphia region shrank at the fastest pace in more than 18 years. The Conference Board’s index of leading economic indicators climbed more than forecast as a jump in money supply masked continued deterioration elsewhere in the economy.
Hewlett-Packard Tumbles
Hewlett-Packard fell $2.69, or 7.9 percent, to $31.39, its steepest tumble since August 2004. Fiscal first-quarter sales trailed estimates, and the company lowered its operating profit forecast for the year to a range of $3.76 to $3.88 a share from an earlier range of $3.88 to $4.03 as the recession saps demand for computers.
Profits dropped 33 percent on average at the 394 companies in the S&P 500 that reported fourth-quarter earnings since Jan. 12, according to data compiled by Bloomberg. The period is poised to be the sixth straight quarter of decreasing profits, the longest streak on record. Health-care companies are the only group among 10 to report higher earnings.
Bank of America, the largest U.S. bank by assets, fell for a fifth straight day, losing 64 cents to a 24-year low of $3.93. Citigroup, which has received $45 billion in U.S. bailout funds, tumbled 40 cents to a 17-year low of $2.51.
The S&P 500 Financials Index retreated 5.2 percent to its lowest level since January 1995. Prudential Financial, the second-largest U.S. life insurer, fell $3.59 to $19.02. Prudential’s short-term debt rating was lowered by Fitch Ratings, rendering the holding company ineligible for the U.S. commercial paper program.
Financial stocks led the S&P 500’s 38 percent decline in 2008, its steepest yearly loss since 1937, as the worst U.S. real-estate slump since the Great Depression produced credit losses of more than $1 trillion globally.
The group, which lost 57 percent of its value last year, has fallen 40 percent this year as rising unemployment casts doubt on the ability of consumers to stay current on other forms of debt. The threat was highlighted today after the Labor Department said the number of Americans collecting jobless benefits jumped to a record 4.99 million two weeks ago, signaling the job market is still deteriorating.
The prospect that the federal government will nationalize some banks, rendering their equity worthless, is dogging Bank of America and Citigroup in particular, said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York.
‘Getting Destroyed’
Investors are “afraid the government’s going to wipe out everybody that’s got an interest,” Schutz said. “Nobody knows what the rule book is. In the meantime, the stocks are getting destroyed.” Mendon manages $150 million in financial stocks, including the two best-performing bank-stock mutual funds over the past three years.
Credit-card defaults are about to surpass a previous high of 7.53 percent as people losing jobs fail to repay debt, according to Fitch Ratings. The defaults may peak at 10 percent to 11 percent of loans by year-end under a stress scenario, Goldman Sachs Group Inc. analyst Brian Foran said yesterday in an e-mail, reducing 2009 earnings for issuers including an almost 40 percent cut for American Express Co.
American Express, the biggest U.S. credit-card company by purchases, lost 8.7 percent to $12.87, a 12-year low. Discover Financial Services Inc., the card company spun off by Morgan Stanley in 2007, tumbled 12 percent to an all-time low of $5.56.
‘Tarred and Feathered’
Stocks rallied early in the day after CVS Caremark Corp., Sprint Nextel Corp. and Whole Foods Market Inc. reported results that topped analysts’ estimates.
“A lot of companies are in great shape but are being tarred and feathered like everybody else,” said Erick Maronak, who manages $1 billion, including CVS shares, as chief investment officer at Victory Capital Management Inc. in New York. “The negatives are overstated when you look at general market activity. This is an opportunity to upgrade your portfolio as long as you’re not looking for results overnight.”
CVS Caremark climbed 6.4 percent to $28.71. Fourth-quarter profit rose 17 percent after it added hundreds of stores to its retail network through the acquisition of Longs Drug Stores Corp.
Sprint Nextel, which dropped 72 percent over the 12 months through yesterday, gained 20 percent to $3.25. It reported a smaller loss than analysts estimated after cutting jobs and expenses.
Whole Foods Rallies
Whole Foods surged 37 percent to $12.75 for the biggest percent gain in its 17 years as a public company. First-quarter earnings excluding certain items of 25 cents a share beat the average analyst estimate by 46 percent.
Stocks in Asia advanced today as a weaker yen boosted the earnings prospects of Japanese automakers. The MSCI Asia Pacific Index increased 0.3 percent, while Europe’s Dow Jones Stoxx 600 Index was little changed.
Governments across the world are stepping up measures to stem the worst global recession since World War II. China’s government will seek to boost domestic demand, increase financial input for the electronics and information-technology industry and maintain the level of export tax rebates for electronic products, the State Council, or cabinet, said. The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit.
U.S. Stocks Decline, Dow Industrials Close at Six-Year Low
By Elizabeth Stanton
Feb. 19 (Bloomberg) -- U.S. stocks dropped, sending the Dow Jones Industrial Average to a six-year low, as Hewlett-Packard Co. cut its profit forecast and concern about rising credit-card defaults dragged financial shares to the lowest level since 1995.
Hewlett-Packard, the world’s largest personal-computer maker, fell 7.9 percent and technology companies were the biggest drag on the Standard & Poor’s 500 Index. Bank of America Corp. and Citigroup Inc. fell 14 percent each to lead the Dow’s retreat. Prudential Financial Inc. slid 16 percent after losing its ability to borrow under a government program because of a credit-rating downgrade.
The S&P 500 slid 1.2 percent to 778.94, extending its 2009 loss to 14 percent in its worst start to a year. The Dow dropped 89.68 points, or 1.2 percent, to 7,465.95, the lowest since October 2002. The Russell 2000 Index declined 1.5 percent.
“The market is trying to digest the severity of the economic slowdown and its effects on tech stocks and capital spending going forward,” said Giri Cherukuri, who helps manage $1.1 billion at Oakbrook Investments in Lisle, Illinois. “People are thinking it’s maybe going to be more severe than expected. That’s going to affect spending for the rest of 2009.”
The S&P 500 fell for a third day yesterday as the Federal Reserve cut its forecast for the U.S. economy this year, while government reports showed industrial production shrank more than forecast and housing starts slid to a record low last month.
Today, a Federal Reserve gauge of manufacturing in the Philadelphia region shrank at the fastest pace in more than 18 years. The Conference Board’s index of leading economic indicators climbed more than forecast as a jump in money supply masked continued deterioration elsewhere in the economy.
Hewlett-Packard Tumbles
Hewlett-Packard fell $2.69, or 7.9 percent, to $31.39, its steepest tumble since August 2004. Fiscal first-quarter sales trailed estimates, and the company lowered its operating profit forecast for the year to a range of $3.76 to $3.88 a share from an earlier range of $3.88 to $4.03 as the recession saps demand for computers.
Profits dropped 33 percent on average at the 394 companies in the S&P 500 that reported fourth-quarter earnings since Jan. 12, according to data compiled by Bloomberg. The period is poised to be the sixth straight quarter of decreasing profits, the longest streak on record. Health-care companies are the only group among 10 to report higher earnings.
Bank of America, the largest U.S. bank by assets, fell for a fifth straight day, losing 64 cents to a 24-year low of $3.93. Citigroup, which has received $45 billion in U.S. bailout funds, tumbled 40 cents to a 17-year low of $2.51.
The S&P 500 Financials Index retreated 5.2 percent to its lowest level since January 1995. Prudential Financial, the second-largest U.S. life insurer, fell $3.59 to $19.02. Prudential’s short-term debt rating was lowered by Fitch Ratings, rendering the holding company ineligible for the U.S. commercial paper program.
Financial stocks led the S&P 500’s 38 percent decline in 2008, its steepest yearly loss since 1937, as the worst U.S. real-estate slump since the Great Depression produced credit losses of more than $1 trillion globally.
The group, which lost 57 percent of its value last year, has fallen 40 percent this year as rising unemployment casts doubt on the ability of consumers to stay current on other forms of debt. The threat was highlighted today after the Labor Department said the number of Americans collecting jobless benefits jumped to a record 4.99 million two weeks ago, signaling the job market is still deteriorating.
The prospect that the federal government will nationalize some banks, rendering their equity worthless, is dogging Bank of America and Citigroup in particular, said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York.
‘Getting Destroyed’
Investors are “afraid the government’s going to wipe out everybody that’s got an interest,” Schutz said. “Nobody knows what the rule book is. In the meantime, the stocks are getting destroyed.” Mendon manages $150 million in financial stocks, including the two best-performing bank-stock mutual funds over the past three years.
Credit-card defaults are about to surpass a previous high of 7.53 percent as people losing jobs fail to repay debt, according to Fitch Ratings. The defaults may peak at 10 percent to 11 percent of loans by year-end under a stress scenario, Goldman Sachs Group Inc. analyst Brian Foran said yesterday in an e-mail, reducing 2009 earnings for issuers including an almost 40 percent cut for American Express Co.
American Express, the biggest U.S. credit-card company by purchases, lost 8.7 percent to $12.87, a 12-year low. Discover Financial Services Inc., the card company spun off by Morgan Stanley in 2007, tumbled 12 percent to an all-time low of $5.56.
‘Tarred and Feathered’
Stocks rallied early in the day after CVS Caremark Corp., Sprint Nextel Corp. and Whole Foods Market Inc. reported results that topped analysts’ estimates.
“A lot of companies are in great shape but are being tarred and feathered like everybody else,” said Erick Maronak, who manages $1 billion, including CVS shares, as chief investment officer at Victory Capital Management Inc. in New York. “The negatives are overstated when you look at general market activity. This is an opportunity to upgrade your portfolio as long as you’re not looking for results overnight.”
CVS Caremark climbed 6.4 percent to $28.71. Fourth-quarter profit rose 17 percent after it added hundreds of stores to its retail network through the acquisition of Longs Drug Stores Corp.
Sprint Nextel, which dropped 72 percent over the 12 months through yesterday, gained 20 percent to $3.25. It reported a smaller loss than analysts estimated after cutting jobs and expenses.
Whole Foods Rallies
Whole Foods surged 37 percent to $12.75 for the biggest percent gain in its 17 years as a public company. First-quarter earnings excluding certain items of 25 cents a share beat the average analyst estimate by 46 percent.
Stocks in Asia advanced today as a weaker yen boosted the earnings prospects of Japanese automakers. The MSCI Asia Pacific Index increased 0.3 percent, while Europe’s Dow Jones Stoxx 600 Index was little changed.
Governments across the world are stepping up measures to stem the worst global recession since World War II. China’s government will seek to boost domestic demand, increase financial input for the electronics and information-technology industry and maintain the level of export tax rebates for electronic products, the State Council, or cabinet, said. The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit.
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