Opposite the bear start?
NEW YORK | Wall Street again surrendered to investors' fear of the financial sector Monday, sending the Dow Jones Industrials 240 points down and back into bear market territory. The flight of shares to investors in safe-haven bets like Treasury bonds.
Financials that the troops in recent weeks after registering huge declines suffered under the same care to ensure that souring debt caused an abrupt end of their run-up to the end of last week. Wall Street is concerned that a further withering of housing and credit markets will damage bank balance sheets. An International Monetary Fund report added, some of the stress on the market. The IMF forecasts continuing problems in the credit and housing market will continue to hurt the financial industry. He said, "at the moment an end to the housing market is not visible." Frederic Dickson, chief market strategist for DA Davidson & Co., said investors are still trying to longer-term view on the stability of the banking sector, particularly with regional banks. "Our depositors and individual savers are looking balances in the various financial institutions. I think that is frightening some of the banks." On Friday, federal officials closed branches of the 1st National Bank of Nevada and First Heritage Bank NA of Scottsdale, Arizona, adding to investor jitters about the ability of some banks to stay afloat. The Dow Jones Industrial Average fell 239.61 or 2.11 percent to 11131.08. Broader stock indicators also declined. The Nasdaq Composite Index fell into bear market territory to shed 46.31 or 2.00 percent to 2264.22. The Standard & Poor's 500 index fell 23.39 or 1.86 percent to 1234.37 and it was in the area, for the last few weeks. Bond prices jumped as investors tried again the safety of the public debt. The yield on the benchmark 10-year Treasury note, compared to its price, fell to 4.01 percent from 4.10 percent late Friday. The dollar was mixed against other major currencies, gold, while prices fell. Light, sweet crude rose $ 1.47 to settle at $ 124.73 on the New York Mercantile Exchange. Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams, said investors sold financial shares because of their continuing concern about housing. "They are the financial values to the woodshed," he said. "Until the real estate market stabilizes you really can not see, the finances to stabilize." In finance, Citigroup Inc. fell $ 1.42, or 7.5 percent to 17.43 U.S. dollars, while Morgan Stanley fell $ 1.79, or 4.9 percent to $ 34.96. Verizon Communications Inc. said its second quarter profit rose by 12 percent of its revenue, but came short of Wall Street forecasts. Verizon fell 85 cents, or 2.5 percent to $ 33.60. Kraft, the makers of Oreo cookies and Maxwell House coffee, said contributed to higher prices offset rising raw material costs and lifted second quarter profits nearly 4 percent. The company's shares rose $ 1.45, or 4.9 percent to $ 30.83. Tyson Foods Inc., the world's largest meat company, fell $ 1.14 or 7 percent to 15.09 U.S. dollars after reporting a 90 percent decline in third quarter profits due to rising cost of grain used to feed chickens. Amgen Inc. rose $ 6.56, or 12.2 percent to 60.48 U.S. dollars after the company positive test results for its osteoporosis drug candidate denosumab. Declining issues outnumbered advanced by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 4.16 billion shares, to 4.55 billion Friday. |
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