MARKET SNAPSHOT: U.S. Stocks Decline As Madoff Losses Hit Home
15 Diciembre 2008 - 12:25PM
Noticias Dow Jones
By Kate Gibson
U.S. stocks fell Monday after starting off mixed, with financial
shares weighing on the broader market and firms detailing their
exposure to the alleged $50 billion fraud by Bernard Madoff.
"What's amazing is the magnitude of bad news that we've had to
digest during the last two weeks, but still the market remains
resilient," said Art Hogan, chief market strategist at Jefferies
& Co.
After climbing two out of the last three sessions, the Dow Jones
Industrial Average (DJI) on Monday shed 103 points to 8,523, with
25 of its 30 components posting losses.
As with the broader market, financials weighed the most on the
blue-chip index, with J.P. Morgan Chase & Co. (JPM) off 7% and
American Express Co. (AXP) down 2%. Bank of America Corp. (BAC)
fell 4.8% and Citigroup Inc. (C) fell 3.5%.
The S&P 500 Index (SPX) fell 11 points to 868, with
financials down the most, while energy fronted the S&P's
limited gains among the index's 10 industry groups.
The bigger laggards among financial shares included Developers
Diversified Realty Corp. (DDR), off 16%, and ProLogis (PLD), down
8%.
Noteworthy gains among financials included Peabody Energy Corp.
(BTU), lately up 6%, and Consol Energy Inc. (CNX), up nearly
2%.
The Nasdaq Composite Index (RIXF) shed 29 points to 1,511.
Crude futures lost early gains, after rallying sharply last week
ahead of a meeting of the Organization of Petroleum Exporting
Countries on Wednesday. OPEC is expected to be cut production
again. Light crude for January delivery was recently down 36 cents
to $45.92 a barrel on the New York Mercantile Exchange. .
The dollar fell sharply against other major currencies, with the
dollar index (DXY) down 1% to 82.33. .
"The uncertainty surrounding the fate of the U.S. auto industry,
coupled with the market's expectation of an imminent Fed rate cut
on Tuesday, pressured the dollar to start the week in a distresses
state," said Rebecca Lia, a currencies analyst with Wachovia
Corp.
Volume on the New York Stock Exchange neared 883 million, with
decliners overtaking advancers 3 to 1. On the Nasdaq, more than 295
million shares traded, and decliners beat advancers nearly 2 to
1.
Record contraction
The economic calendar for Monday included the December Empire
State Index, with the gauge of manufacturing activity in the New
York region contracting at a record pace in November.
In a separate report, the Federal Reserve said output of the
nation's factories, mines and utilities declined 0.6% in November
on broad-based weakness across manufacturing industries. .
Investors also will be looking ahead to Tuesday's Federal
Reserve interest-rate decision, where rates are expected to come
down half a point to 0.5%. .
"The FOMC meeting should be overshadowed this week by earnings
from Goldman Sachs Group (GS) on Tuesday and Morgan Stanley (MS) on
Thursday," said Marc Pado, U.S. strategist at Cantor
Fitzgerald.
The Wall Street Journal reported Monday that the Bush
administration is sizing up what terms to seek from the auto
industry in return for a bailout, including whether to push the
companies to file for bankruptcy.
The White House is discussing a rescue totaling $10 billion to
$40 billion or more, the Journal reported. "We've gone from
expecting to hoping," said Hogan of the efforts to shore up the
embattled industry.
Shares in General Motors Corp. (GM) and Ford Motor Co. (F) rose
5% and 3.6%, respectively.
As more details of the alleged fraud by former Nasdaq Chairman
Bernard Madoff emerged, Banco Santander SA (STD) said its customers
had an exposure of around $3.1 billion though its Optimal
asset-management business, while Japan's Nomura Holdings Inc. (NMR)
has an exposure of around $302 million.
Former Dow component Honeywell International Inc. (HON) shares
rose 5% after the industrial company reaffirmed its full-year
guidance. .
Late Sunday, Huntsman Corp. (HUN) ended its agreement to be
acquired by Hexion Specialty Chemicals Inc. and reached a
settlement over litigation. Huntsman said it is due payments
totaling $1 billion.
In international markets, Japan's Nikkei 225 rose 5.3% and the
French CAC 40 index added 0.3%.
Stocks on Friday erased early losses to close higher after the
Bush administration said it would step in to prevent a failure of
U.S. automakers, amid fears that more job losses would deepen the
recession.
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