US stocks end down - Hindustan Times
close_game
close_game

US stocks end down

Reuters | ByKristina Cooke, New York
Jul 19, 2007 04:25 AM IST

US stocks fall after a warning from the Federal Reserve chairman that weakness in housing could hurt economic growth for some time.

US stocks fell on Wednesday on deepening concerns that a crisis in lending could spread and a warning from the Federal Reserve chairman that weakness in housing could hurt economic growth for some time.

HT Image
HT Image

Disappointing results from technology bellwethers also weighed on stocks. Shares of Intel Corp (INTC.O: Quote, Profile, Research) and Yahoo (YHOO.O: Quote, Profile, Research) fell nearly 5 per cent after their quarterly scorecards fell short of some expectations.

Hindustan Times - your fastest source for breaking news! Read now.

The sour mood was set late Tuesday when Bear Stearns said two hedge funds with big bets on the sector were nearly worthless, confirming Wall Street's worst suspicions. Then Fed chief Ben Bernanke further rattled investors by saying that the worst was not over for the housing downturn.

"Subprime concerns are driving the market lower -- is Bear Stearns an isolated situation or is it contagious?" said Georges Yared, chief investment strategist at Yared Investment Research, in Minneapolis.

"And the chairman of the Fed is throwing cold water on the parade in terms of lower growth expectations and an extended housing correction."

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 53.33 points, or 0.38 per cent, to end at 13,918.22, a day after it hit an intraday high above the 14,000 milestone.

The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 3.20 points, or 0.21 per cent, to finish at 1,546.17. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 12.80 points, or 0.47 per cent, to close at 2,699.49.

All major indexes fell more than 1 per cent to session lows just after midday. But during the afternoon, shares of major energy companies helped curb some of the market's losses. Exxon Mobil (XOM.N: Quote, Profile, Research) gained 2.3 per cent to $91.15, as US crude oil (CLQ7: Quote, Profile, Research) ended up 1.4 per cent, or $1.03, at $75.05 a barrel.

After the closing bell, shares of IBM (IBM.N: Quote, Profile, Research), the world's largest technology services company, rose 1.2 per cent to $112.40 after its earnings beat estimates.

But eBay Inc.'s (EBAY.O: Quote, Profile, Research) shares fell 1 per cent to $33.70 in extended trade. The Internet auctioneer posted a net profit just above the average analysts' estimate and left its 2007 outlook unchanged, defying Wall Street's hopes for a boost.

Mortgage misery

During the regular session, shares of investment bank Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research) fell 0.4 per cent to $139.34 on the New York Stock Exchange.

But Bear Stearns was not the only company causing investors concern, with the search on for further fallout from the lending crisis.

Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research) stock fell on market rumors --which were denied by a spokeswoman at the bank-- that the investment bank would announce its exposure to subprime loans was wider than previously disclosed.

Lehman's stock was down 1.9 per cent at $71.65 after falling to a session low of $70.30 on the NYSE.

JPMorgan Chase & Co's (JPM.N: Quote, Profile, Research) stock fell 2.4 per cent to $48.74, after the bank's chief financial officer said it tripled the amount set aside for loan losses as even borrowers with good credit defaulted on home equity loans.

Shares of United Technologies Corp (UTX.N: Quote, Profile, Research) fell 1.7 per cent to $75.56 and were among the top drags on the Dow, after an executive at the diversified manufacturer said the slowdown in the US housing market is worse than expected.

Adding to worries about the housing market, Pulte Homes Inc (PHM.N: Quote, Profile, Research), the No. 3 US home builder, said late on Tuesday it expects a second-quarter loss. Pulte shares fell 2.3 per cent to $22.19 on the NYSE.

Pfizer, Intel disappoint

Pfizer Inc (PFE.N: Quote, Profile, Research) fell 3.2 per cent to $25.13 after the drug maker reported earnings and revenues that missed Wall Street's estimates. (ID:nN18310018: Quote, Profile, Research).

Chip maker Intel reported profit margins that fell short of the market's expectations, driving its stock down 4.8 per cent to $25.06 on the Nasdaq. Internet media company Yahoo reported a dip in quarterly profit, sending its shares down 4.8 per cent to $26.20.

With so much else going on, normally market-moving indicators took a back seat. US consumer prices rose by a slightly bigger-than-expected 0.2 per cent in June, the Labor Department reported.

Building permits -- a measure of future construction plans -- plunged, but housing starts rose last month.

Trading was moderate on the NYSE, with about 1.77 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.27 billion shares traded, above last year's daily average of 2.02 billion.

Declining stocks outnumbered advancing ones by a ratio of about 2 to 1 on the NYSE and by about 3 to 2 on Nasdaq.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On