Economic, credit fears punish Wall Street

NEW YORK - Stocks slid on Thursday as tight credit markets and bleak economic data forced investors to focus on the rocky road still ahead for the US economy even if Congress passes a US$700 billion rescue package this week.

The Dow shed more than 3 per cent while the S&P 500 and Nasdaq dropped 4 per cent as Wall Street worried the economy may slide into recession, further cutting into corporate profits.

Data showing the number of people filing for unemployment benefits hit a seven-year high painted a troubling picture, as did a report showing a steep drop in factory orders in August.

The price of oil plummeted more than 4 per cent as financial market turmoil stoked concerns about demand for fuel and precious metals slid as the dollar rose.

The Dow Jones industrial average fell 348.22 points, or 3.22 per cent, to 10,482.85, while the Standard & Poor's 500 Index slid 46.78 points, or 4.03 per cent, to 1,114.28. The Nasdaq Composite Index dropped 92.68 points, or 4.48 per cent, to 1,976.72 - a three-and-a-half-year low.

Source: Singapore Business Times - 03 Oct 2008

Wall Street slips on credit woes, economy

* Senate due to vote on revamped US$700 billion bailout
* Manufacturing, jobs data heighten economic worry
* GE shares trim losses after Buffett makes investment
* Dow off 0.2%, S&P off 0.5%, Nasdaq off 1.1%

NEW YORK - US stocks fell on Wednesday as tight credit markets and bleak economic data kept investors on edge before the Senate votes on a revamped financial sector rescue plan that was initially rejected by lawmakers.

Trading was volatile a day after Wall Street gave its best daily performance in six years, and investors worried about how effective a US$700 billion bank rescue in the United States would be in averting recession.

Investors unloaded shares of technology, industrial and energy shares, including economic bellwethers General Electric (GE), down nearly 4 per cent, and heavy-equipment maker Caterpillar, off 4.5 per cent.

Late in the day, GE shares moved off their lows after investor Warren Buffett said he planned to pump US$3 billion into the diversified manufacturer, though the gains were short-lived.

But investors' main focus was on the fate of the rescue plan, which was expected to come to a vote on the Senate floor after the market closed on Wednesday. The House of Representatives shocked markets by voting down an earlier version on Monday.

The Dow Jones industrial average ended down 19.59 points, or 0.18 per cent, at 10,831.07. The Standard & Poor's 500 Index fell 3.68 points, or 0.32 per cent, to 1,161.06. The Nasdaq Composite Index lost 22.48 points, or 1.07 per cent, to 2,069.40.

Financial shares rose as investors hoped for a thumbs-up vote from the Senate. The S&P financial index advanced 2.2 per cent, while Citigroup shares climbed 12 per cent to US$23 and JPMorgan Chase rose 6.3 per cent to US$49.63.

Source: Singapore Business Times - 02 Oct 2008

Wall Street rallies on bailout revival hopes

NEW YORK - Wall Street roared back on Tuesday, a day after its worst sell-off in 21 years as investors bet Washington would revive a plan to stabilise the US financial sector following its surprising defeat on Monday on Capitol Hill.

Adding to the positive tone was a Reuters report that US regulators intend to provide new accounting guidelines that could slow the heavy flow of mortgage-related losses on banks' balance sheets. The Dow jumped 485 points after posting a one-day record loss of 778 points on Monday.

Strains persisted in credit markets, however, suggesting banks remain reluctant to lend to each other, and September marked the benchmark S&P 500's worst month in six years.

But investors were feeling more optimistic after President George W. Bush and congressional leaders pledged to continue talks on a US$700 billion financial-sector rescue plan.

The S&P 500 rose more than 5 per cent, recovering more than half of the losses booked on Monday when the House of Representatives rejected the plan, which would have let the US Treasury buy bad mortgage debt from stressed banks so they can resume lending.

Tuesday's climb marked the S&P's best one-day percentage gain since July 2002.

Under current rules, banks must value assets based on what they would fetch in a current market transaction. Since prices for mortgage-related assets have long been at distressed levels, banks have been forced to scurry for more capital.

The Dow Jones industrial average rallied 485.21 points, or 4.68 per cent, to 10,850.66. The Standard & Poor's 500 Index jumped 58.35 points, or 5.27 per cent, to 1,164.74. The Nasdaq Composite Index climbed 98.60 points, or 4.97 per cent, to 2,082.33.

For the month of September, the Dow fell 6 per cent - its worst month since June. Tuesday also marked the end of the third quarter, when the Dow fell 4.4 per cent. This was the Dow's worst quarter since the second quarter of this year.

This is the Dow's longest quarterly losing streak since 1977-1978.

Source: Singapore Business Times - 01 Oct 2008

Dow suffers record point drop as House rejects bailout

NEW YORK - The Dow industrials plunged on Monday in the blue-chip average's biggest one-day point drop ever after US lawmakers unexpectedly rejected a US$700 billion financial bailout, spooking investors who saw it as essential to halting a global market meltdown.

The Dow lost about 778 points and posted its biggest daily percentage decline since the October 1987 stock market crash, while the benchmark S&P 500 also had its worst day in 21 years after the House sent the bailout plan to defeat by a vote of 228 to 205.

The tech-heavy Nasdaq had its worst day since April 2000 when the Internet bubble collapsed.

The failure of the bill, which would have let the Treasury buy up bad mortgage debt from struggling banks, added to serious concerns after the credit crisis claimed new victims, including Wachovia Corp and a bevy of European banks.

Fear was deep and widespread, as investors dumped stocks for the relative safety of US government bonds. The Chicago Board Options Exchange Volatility Index, Wall Street's main barometer of investor fear, jumped 39 per cent to 48.40, a nearly six-year high, and was at 46.72 at the close.

The Dow Jones industrial average sank 777.68 points, or 6.98 per cent, to 10,365.45. The Standard & Poor's 500 Index was down 106.59 points, or 8.79 per cent, at 1,106.42. The Nasdaq Composite Index was down 199.61 points, or 9.14 per cent, at 1,983.73.

Source: Singapore Business Times - 30 Sep 2008

Dow, S&P gain on bailout hopes, Nasdaq slips

NEW YORK - Stocks ended mostly higher on Friday as big bank shares staged a late rally on hopes lawmakers would hammer out an agreement on a US$700 billion financial-sector rescue plan this weekend.

But tech shares took it on the chin, keeping the Nasdaq in the red, after a disappointing outlook from BlackBerry maker Research in Motion. considered a bellwether for the sector.

Friday's market gains were in sharp contrast to the rest of the week, which was the worst for the benchmark S&P 500 since May.

Trading volume was light, with most traders glued to the increasingly acrimonious debate in Washington over Treasury's plan to mop up bad mortgage debt from bank balance sheets to get them lending again.

Shares of JPMorgan Chase, up 11 per cent and Bank of America, up nearly 7 per cent, ranked among the top gainers in both the Dow and the S&P 500. An S&P index of financial shares rose 3.2 per cent.

The Dow Jones industrial average was up 121.07 points, or 1.10 per cent, at 11,143.13. The Standard & Poor's 500 Index was up 4.09 points, or 0.34 per cent, at 1,213.27. But the Nasdaq Composite Index was down 3.23 points, or 0.15 per cent, at 2,183.34.

The fate of the rescue plan pushed nearly everything else to the background on Friday, including US bank regulators' move to close Washington Mutual late on Thursday, the largest US bank failure in history.

Source: Singapore Business Times - 27 Sep 2008

Wall St jumps as bailout approval nears

NEW YORK - Wall Street snapped a three-day losing streak on Thursday as Congress closed in on a deal for a US$700 billion financial-sector bailout that investors hope will thaw credit markets and revive lending.

All three major indexes ended up at least 1 per cent, with bank shares such as JPMorgan Chase and Bank of America leading gains after Senate Banking Committee Chairman Chris Dodd said lawmakers had reached a "fundamental agreement" on the principles of a rescue plan.

Companies seen as economic bellwethers, such as IBM, also rose on hopes the rescue package would spur a pickup in consumer and business spending.

The Dow Jones industrial average was up 196.89 points, or 1.82 per cent, at 11,022.06. The Standard & Poor's 500 Index was up 23.31 points, or 1.97 per cent, at 1,209.18. The Nasdaq Composite Index was up 30.89 points, or 1.43 per cent, at 2,186.57.

The package to which Congress tentatively agreed would make a first slug of $250 billion available immediately, the Wall Street Journal reported, and would contain limits on 'golden parachutes' paid to company executives.

Source: Singapore Business Times - 26 Sep 2008

Bailout worries hit Dow, S&P, techs help Nasdaq

NEW YORK - The Dow and S&P 500 edged lower on Wednesday as uncertainty about when Congress might approve a proposed US$700 billion financial sector bailout offset Warren Buffett's US$5 billion bet on Goldman Sachs.

Fear that congressional wrangling could delay or weaken the Bush administration's plan to mop up bad mortgage debt from banks' balance sheets kept stocks in check throughout the day.

The Nasdaq, though, clung to slender gains on hopes that technology spending would increase once a version of the bailout plan becomes law. The Dow and S&P declined for the third straight day.

Federal Reserve Chairman Ben Bernanke urged Congress' Joint Economic Committee to pass the bailout, saying delay would keep lenders from extending credit to households and businesses, but lawmakers voiced doubt about the size and scope of the plan.

The Dow Jones industrial average was down 29.00 points, or 0.27 per cent, at 10,825.17. The Standard & Poor's 500 Index was down 2.35 points, or 0.20 per cent, at 1,185.87. The Nasdaq Composite Index XIC was up 2.35 points, or 0.11 per cent, at 2,155.68.

Despite uneasiness about the bailout, traders said Buffett's decision to invest US$5 billion in Goldman Sachs was encouraging. Goldman's stock rose 6.4 per cent to US$133, while the Class A stock of Berkshire Hathaway, Buffett's holding company, added 3.5 per cent to US$133,300.

Source: Singapore Business Times - 25 Sep 2008

Stocks end lower as concerns about bailout weigh

NEW YORK - Stocks fell on Tuesday on fear that congressional wrangling could delay a proposed US$700 billion plan to rescue the financial sector, increasing worries about the struggling US economy.

Downgrades also hurt the shares of Bank of America, off 2.5 per cent, while energy company shares weakened with the price of oil.

The main focus, though, was on the government's rescue plan, which involves mopping up bad mortgage debt from bank balance sheets in an effort to get them lending again.

Federal Reserve Chairman Ben Bernanke on Tuesday urged Congress to approve the plan quickly, warning a delay would put the economy at risk, but lawmakers pushed back, saying it still lacked detail.

The Dow Jones industrial average was down 161.52 points, or 1.47 per cent, at 10,854.17. The Standard & Poor's 500 Index was down 18.87 points,1 or 1.56 per cent, at 1,188.22. The Nasdaq Composite Index was down 25.64 points, or 1.18 per cent, at 2,153.34.

Mr Bernanke told the Senate Banking Committee that 'action by Congress is urgently required to stabilise the situation and avert what could otherwise be very serious consequences for our financial markets and our economy.'

But doubts about the bailout plan took centre stage by late afternoon, and some traders said that even a swift passage of the bill would not lead to the end of the credit crisis or necessarily bolster the slumping US housing market.

Source: Singapore Business Times - 24 Sep 2008