Wall Street slips on recession worry

NEW YORK - Stocks fell on Tuesday as fears that the global economy may not avert recession slammed shares of technology and consumer companies, eclipsing a government rescue plan for banks.

A day after the Dow leaped 936.42 points in its biggest one-day point gain ever, investors looked past the US pledge to pour US$250 billion into major banks and instead focused on the dismal outlook for earnings and the economy.

A disappointing outlook from PepsiCo further fuelled those worries, especially given that soft drink- and snack-makers are usually seen as holding up in economic hard times. PepsiCo's shares had their worst day since the 1987 stock market crash.

The Nasdaq underperformed throughout the day. Intel was among the top drags on the Nasdaq as investors worried about the chipmaker's quarterly results. Intel lost 6.2 per cent to US$15.93 on Nasdaq, while an index of semiconductor stocks slid 5 per cent.

But after the closing bell, Intel's shares shot up more than 4 per cent after its earnings beat analyst expectations.

During the regular session, financial shares rose after the US Treasury's latest step to stabilise the financial system in hopes of averting further damage to the economy. Citigroup jumped 18.2 per cent and Bank of America climbed 16.4 per cent.

The Dow Jones industrial average was down 76.62 points, or 0.82 per cent, at 9,310.99. The Standard & Poor's 500 Index was down 5.34 points, or 0.53 per cent, at 998.01. The Nasdaq Composite Index was down 65.24 points, or 3.54 per cent, at 1,779.01.

Source: Singapore Business Times - 15 Oct 2008