Saguaro
11-09-2007, 10:03 AM
NEW YORK - Stocks tumbled Friday, with the Dow Jones industrial average dropping over 100 points in early trading after Wachovia Corp. said it expects to increase quarterly loan losses, raising investor concern about the continuing credit crisis.
The nation’s fourth-largest bank said in a filing with the Securities and Exchange Commission that credit market volatility could cause a $1.1 billion writedown for October alone. The problem stems from its asset-backed securities, such as collateralized debt obligations, that have lost value on sinking investor demand.
Investors also were rattled by speculation that Barclays PLC was about to announce a $10 billion writedown. Though the British bank denied the rumors, it demonstrated that Wall Street continues to worry that the summer’s credit turmoil shows no signs of abating, and has a broader impact globally.
The market was also still on edge after Federal Reserve Chairman Ben Bernanke said Thursday that policy makers expect the economy to “slow noticeably” this quarter. His comments caused major indexes to fall — contributing to a slide this week on concerns about continuing credit woes, a weakening dollar and rising oil prices.
He also said the greenback’s problems “may have some effect on import prices” — which was confirmed Friday in new government data. The Commerce Department reported U.S. import prices soared last month at their fastest pace since early last year while export prices jumped at more than a decade high.
The Dow Jones industrial average was lately down 156.08 points, or 1.18 percent. On Wednesday the Dow fell 360.92 points — the third drop of more than 350 points in a month, offering the latest sign of how jittery many investors remain.
The broader Standard & Poor’s 500-stock index was lately down 22.07 points, or 1.50 percent, while the technology-heavy Nasdaq Composite index fell 61.84 points, or 2.29 percent.
The preliminary Reuters/University of Michigan monthly index of consumer sentiment will be released Friday at 10 a.m. EST. Economists expect consumer sentiment will inch downward amid persistent worries about the housing recession and high energy prices.
Key among their worries is the escalating prices of oil, which has been trading just off of $100 a barrel. Light, sweet crude fell 44 cents to $95.02 in premarket electronic trading on the New York Mercantile Exchange.
Both gold and the dollar were also lower in premarket trading.
Investors were also concerned after Qualcomm Inc., the nation’s second-biggest maker of chips that run mobile phones, predicted late Thursday after the closing bell that competition and legal troubles will cause 2008 results to fall 4 percent to 7 percent below Wall Street projections.
Merck & Co. said it will pay $4.85 billion to settle thousands of lawsuits over its painkiller Vioxx — a move considered to be the biggest drug settlement ever. The offer was finalized early Friday as Merck and the plaintiffs met with three of the four judges overseeing the claims.
Wireless high-speed Internet provider Clearwire Corp. and Sprint Nextel Corp. announced before the bell they scrapped an agreement to jointly build a nationwide WiFi network. Clearwire also reported its third-quarter loss widened more than expected.
Walt Disney & Co. shares were also in focus after the entertainment company said late Thursday fiscal fourth-quarter profit rose 12 percent, driven by sports network ESPN and turnout at its U.S. theme parks. However, executives remain concerned about a Hollywood writers strike that began this week.
Overseas, Japan’s Nikkei stock average closed down 1.19 percent and Hong Kong’s Hang Seng index rose 0.08 percent. In afternoon trading, Britain’s FTSE 100 fell 0.66 percent, Germany’s DAX index rose 0.50 percent, and France’s CAC-40 shed 0.96 percent.
http://www.msnbc.msn.com/id/3683270/
The nation’s fourth-largest bank said in a filing with the Securities and Exchange Commission that credit market volatility could cause a $1.1 billion writedown for October alone. The problem stems from its asset-backed securities, such as collateralized debt obligations, that have lost value on sinking investor demand.
Investors also were rattled by speculation that Barclays PLC was about to announce a $10 billion writedown. Though the British bank denied the rumors, it demonstrated that Wall Street continues to worry that the summer’s credit turmoil shows no signs of abating, and has a broader impact globally.
The market was also still on edge after Federal Reserve Chairman Ben Bernanke said Thursday that policy makers expect the economy to “slow noticeably” this quarter. His comments caused major indexes to fall — contributing to a slide this week on concerns about continuing credit woes, a weakening dollar and rising oil prices.
He also said the greenback’s problems “may have some effect on import prices” — which was confirmed Friday in new government data. The Commerce Department reported U.S. import prices soared last month at their fastest pace since early last year while export prices jumped at more than a decade high.
The Dow Jones industrial average was lately down 156.08 points, or 1.18 percent. On Wednesday the Dow fell 360.92 points — the third drop of more than 350 points in a month, offering the latest sign of how jittery many investors remain.
The broader Standard & Poor’s 500-stock index was lately down 22.07 points, or 1.50 percent, while the technology-heavy Nasdaq Composite index fell 61.84 points, or 2.29 percent.
The preliminary Reuters/University of Michigan monthly index of consumer sentiment will be released Friday at 10 a.m. EST. Economists expect consumer sentiment will inch downward amid persistent worries about the housing recession and high energy prices.
Key among their worries is the escalating prices of oil, which has been trading just off of $100 a barrel. Light, sweet crude fell 44 cents to $95.02 in premarket electronic trading on the New York Mercantile Exchange.
Both gold and the dollar were also lower in premarket trading.
Investors were also concerned after Qualcomm Inc., the nation’s second-biggest maker of chips that run mobile phones, predicted late Thursday after the closing bell that competition and legal troubles will cause 2008 results to fall 4 percent to 7 percent below Wall Street projections.
Merck & Co. said it will pay $4.85 billion to settle thousands of lawsuits over its painkiller Vioxx — a move considered to be the biggest drug settlement ever. The offer was finalized early Friday as Merck and the plaintiffs met with three of the four judges overseeing the claims.
Wireless high-speed Internet provider Clearwire Corp. and Sprint Nextel Corp. announced before the bell they scrapped an agreement to jointly build a nationwide WiFi network. Clearwire also reported its third-quarter loss widened more than expected.
Walt Disney & Co. shares were also in focus after the entertainment company said late Thursday fiscal fourth-quarter profit rose 12 percent, driven by sports network ESPN and turnout at its U.S. theme parks. However, executives remain concerned about a Hollywood writers strike that began this week.
Overseas, Japan’s Nikkei stock average closed down 1.19 percent and Hong Kong’s Hang Seng index rose 0.08 percent. In afternoon trading, Britain’s FTSE 100 fell 0.66 percent, Germany’s DAX index rose 0.50 percent, and France’s CAC-40 shed 0.96 percent.
http://www.msnbc.msn.com/id/3683270/