U.S. stocks retreat on recession concern; Alcoa shares tumble
Alcoa Inc., the largest U.S. aluminum producer, tumbled 16 percent as a reduction in manufacturing caused by the credit crisis left the company with earnings that trailed analyst estimates. J.C. Penney Co. dropped as much as 8.3 percent after same-store sales slumped in September. Russia, Indonesia, Ukraine and Romania shut their exchanges and Brazil's benchmark index fell to the lowest level in two years in the worst week for emerging markets in at least two decades.
The Standard & Poor's 500 Index lost 16.86 points, or 1.7 percent, to 979.37 at 12:21 p.m. in New York. The Dow Jones Industrial Average slid 175.94, or 1.9 percent, to 9,271.17. The Nasdaq Composite Index decreased 1.5 percent to 1,727.86. Four stocks fell for each that rose on the New York Stock Exchange.
"The uncomfortable reality is that this mess is going to take more time than anyone wants to come to grips with," said Matthew Kaufler, a fund manager at Rochester, New York-based Clover Capital Management Inc., which oversees $2.6 billion. "For the first time in couple of decades, we have the prospect of a consumer recession."
Global Slump The MSCI World Index of 23 developed markets extended its five-day retreat to more than 14 percent, the worst since the market crash of 1987.
The dollar weakened and 10-year Treasury yields exceeded two-year notes by the most since 2004, signaling investors remain cautious about economic prospects.
The Fed, European Central Bank and four other central banks lowered interest rates in an unprecedented, emergency coordinated bid to ease the economic effects of the financial crisis. The Fed cut its benchmark rate by a half point to 1.5 percent and said the ECB and central banks of the U.K., Canada, Sweden and Switzerland are also reducing borrowing costs.
'More Symbolic' "It's more symbolic than anything else," said Peter Sorrentino, a money manager at Huntington Asset Advisors in Cincinnati, which oversees $16.5 billion. "It's the availability of credit, not the price of credit that's the problem."
Bank of America Corp. dropped $1.68 to $22.09. The bank that's buying Merrill Lynch & Co. sold 455 million shares for $22 each, 8 percent less than yesterday's closing price of $23.77. The shares fell 26 percent in NYSE composite trading Oct. 7, the biggest drop in at least 28 years, after the bank slashed its dividend in half.
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JB
We may feel the effects of Bush economics policies a little…Sound Money | Oct. 8, 2008 at 6:56 p.m.
All I hear is "Bush's Failed Economic Plans" from the Liberal Cooks…
Yeah, Blame Bush | Oct. 8, 2008 at 2:10 p.m.
What you brought up is a fact that Bush haters conviently forget…
Thanks JB | Oct. 8, 2008 at 2:09 p.m.
