Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Wednesday 15th October 2008

Text too small?
Stocks fell on Wall Street after PepsiCo's earnings missed analysts' forecasts, stoking concern corporate profits are set to dwindle even as the US government shores up financial institutions.

The NASDAQ Composite dropped almost 3% paced by Microsoft on speculation demand for computers will slow. Citigroup led a rally in financials after Treasury Secretary Henry Paulson announced a US$250 billion infusion to major banks via a stock-buying plan, guarantees for new debts and purchases of commercial paper.

The NASDAQ fell 3.3% to 1780.95. The Dow Jones Industrial Average declined about 1% to 9292.99 and the Standard & Poor's 500 Index dropped 0.7% to 996.69.

PepsiCo fell 12% to US$54.19. The soft drink and snack food company posted a 9.6% drop in third quarter profit, reduced its forecast and announced plans to cut 3,300 jobs. Coco-Cola Co. fell 6.7% to US$44.08.

Microsoft fell 5.3% to US$24.14 and Intel declined 6.2% to US$15.95. Boeing slipped 4.6% to US$45.02 and Alcoa fell 4.6% to US$13.18.

Among financials, Citigroup, which is said to be one of the recipients of the US$250 billion aid package, surged 21% to US$19.08 and Bank of America gained 15% to US$26.15.

Bank of America Mellon Corp. was appointed caretaker of the US federal government's US$700 billion rescue package, beating out rivals for the contract including JPMorgan Chase.

Bloomberg News cited New York University professor of economics Nouriel Roubini as saying the US is headed for its worst recession in 40 years, lasting as much as 24 months and pushing the unemployment in to 9%. House prices may fall another 15%, he said, according to the report.

US Treasury bonds fell as the Treasury prepared to pump cash into the nation's banks. The yield on two-year notes rose 13 basis points to 1.77% and the yield on 10-year notes gained 15 basis points to 4.08%.

The rescue plans also weighed on gold as the rush for haven investments abated. Gold futures for December delivery dropped 0.4% to $839.50 an ounce on the New York Mercantile Exchange.

Crude oil fell on concern waning economic growth will sap demand for fuel.

Oil for November delivery fell 2.9% to US$78.87 a barrel on the New York Mercantile Exchange and has almost halved in value from its high in July of US$147.27 a barrel.

The dollar declined against the euro and the yen as the infusion of cash into US banks and European government efforts to pump dollars into the financial system reduced demand for the currency. The Bank of Japan has also weighed in, offering Japanese lenders unlimited supplies of dollars to help bolster liquidity in credit markets.

The dollar fell to $1.3659 per euro in New York from $1.3581 yesterday. It traded at 101.92 against the yen from 102.01 the previous day.

Yesterday, China released details of its foreign currency reserves, showing they rose to a record US$1.9 trillion, giving the world's fourth-biggest economy more scope to weather a global economic slump.

UK inflation accelerated last month to 5.2% from a year earlier, topping economists' forecasts.

European stocks rose. Germany's DAX 30 gained 2.7% to 5199.19 and the FTSE100 rose 3.2% to 4394.21. The Dow Jones Stoxx 600 Index rose 3% to 232.21, rounding out a 13%, two-day gain.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto
19th October 2021 Morning Report