| |
| |
Bears lie in wait as US teeters on brink
|
|
|
|
|
|
| |
2008-06-30 10:55:00 |
| |
|
| |
UNITED States stocks slumped last week, pushing the Dow Jones Industrial Average to the brink of a bear market.
Mounting fears that writedowns and record oil prices will erode profits and economic growth weighed on the market.
JPMorgan Chase and Co, Citigroup Inc and Bank of America Corp led financial stocks in the Standard and Poor's 500 Index to the fourth week of declines, the longest streak since 2005.
Goldman Sachs Group Inc recommended investors sell bank shares because credit losses will linger into 2009.
United Parcel Service Inc fell the most since July 2006 after saying profit would miss its prior forecast because fuel costs and an "anemic" economy had reduced demand for air shipments.
The Standard and Poor's 500 Index dropped 3 percent to 1,278.38, a three-month low. The Dow average retreated 4.2 percent to 11,346.51 and needs to fall another 0.1 percent to complete a bear-market decline of 20 percent from its October record. The Nasdaq Composite Index lost 3.8 percent to 2,315.63.
"The market is dealing with anxiety about further losses and also coming to grips with the fact we're in a significantly slower period of economic growth," said Kevin Cronin, Boston-based head of investments at Putnam Investments, which manages US$180 billion. "People thought the worst was behind us."
June plunge
Nine out of 10 S&P 500 industries fell last week, giving the index an 8.7 percent plunge in June. That's the steepest monthly slide since September 2002, according to Bloomberg News.
Analysts forecast earnings at companies in the S&P 500 will slump 11 percent on average in the second quarter, according to a Bloomberg survey, compared with a projected decline of 8.9 percent a week earlier.
Goldman Sachs strategist David Kostin said expectations for 2008 and 2009 profits were "too optimistic." Credit deterioration won't peak until next year and raising capital had become more difficult for banks and brokerages because deals had performed poorly, he wrote in a report this week.
Financial stocks in the S&P 500 fell the most since March, retreating 6.6 percent. The group has tumbled 29 percent this year.
JPMorgan, the bank that bought Bear Stearns Cos in a Federal Reserve-backed bailout, lost 7.4 percent to US$35.05, the lowest price since October 2005.
Nine-year low
Citigroup, the biggest US bank by assets, tumbled 11 percent to a nine-year low of US$17.25. Bank of America, which is acquiring mortgage lender Countrywide Financial Corp, slumped 9.3 percent to US$24.59, the lowest since March 2001.
Energy stocks in the S&P 500 rose 1.4 percent after crude oil increased to a record US$142.99 a barrel in New York. The commodity's surge sent the S&P 500 Consumer Discretionary Index to the lowest level since October 2003, while the Dow Jones Transportation Average, a measure of shipping, trucking and rail stocks, declined 5.5 percent.
"People realize they've underestimated the second-half drag to earnings from all these macro issues that we're dealing with," Alexander Young, a New York-based equity-market strategist at Standard and Poor's, said. "The outlook for stocks looks pretty bad."
UPS, the world's biggest package-delivery company, lost 9.1 percent to US$60.36. Chief financial officer Kurt Kuehn said jet-fuel costs had jumped 30 percent this quarter, and recouping those expenses with surcharges had a two-month lag time.
The Russell 2000 Index, of with a median market value of US$498 million, dropped 3.8 percent.(Shanghai Daily)
|
| |
|
|
|
|
Chinese (ÖÐÎÄ°æ)
