Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
US stocks falter as investors battle uncertainty
Source: Agencies |
March 10, 2009, Tuesday
|
Online Edition
Online Edition
INVESTORS fixated on the faltering U.S. economy brushed off the type of merger news that normally starts rallies.
Wall Street closed down more than 1 percent yesterday as uneasiness about the economy eclipsed a bounce in troubled financial stocks and news of a big drug company merger. Stocks rose in the early going but eventually turned lower in a now familiar pattern where short-lived bursts of optimism give way to concerns about the country's economic woes.
Financial stocks rose on a news report that Bank of America Corp. could raise capital in the private sector. Shares of major banks have been pummeled to multiyear lows amid growing concern that they don't have enough cash to cover future losses despite multiple government rescues.
"Any bank right now that can raise money in the private sector, that is a major positive for the market," said Quincy Krosby, chief investment strategist at The Hartford. "It's another way to raise capital rather than the government infusing capital into the banks."
But remarks from billionaire investor Warren Buffett added to an overall downbeat mood. He said during an appearance on CNBC that the economy had "fallen off a cliff" over the past six months. He noted that consumers have changed their habits in remarkable ways.
Investors even wrote off rare dealmaking as moves borne more of necessity than opportunity as drugmakers Merck and Schering-Plough announced plans to combine in a $41 billion deal.
"Any type of news we get, the market is just skeptical," said Jon Biele, head of capital markets at Cowen & Co. "There is nothing in the near term that is going to ratchet us to a different higher level."
The Dow Jones industrial average fell 79.89, or 1.2 percent, to 6,547.05.
The Standard & Poor's 500 index fell 6.85, or 1 percent, to 676.53, while the Nasdaq composite index fell 25.21, or 2 percent, to 1,268.64.
The Russell 2000 index of smaller companies fell 7.79, or 2.2 percent, to 343.26.
About five stocks rose for every two that fell on the New York Stock Exchange, where volume came to 1.56 billion shares.
Both the Dow and the S&P 500 have fallen more than 25 percent this year. The Dow is at its lowest level since the spring of 1997, and the S&P 500 is at its lowest point since the fall of 1996.
The Nasdaq, meanwhile, is at a six-year low.
"There is really not very much for the market to sink its teeth into," said Steve Sachs, director of trading at Rockville, Md.-based Rydex Investments.
Investors were unimpressed with Merck & Co.'s offer for Schering-Plough. Merck has offered Schering-Plough shareholders US$10.50 in cash and just over half of one Merck share for each of their shares. The price represents a 34 percent premium to Schering-Plough's closing stock price on Friday. A combination between the two companies had long been speculated.
Merck dropped US$1.75, or 7.7 percent, to US$20.99, while Schering-Plough rose US$2.50, or 14.2 percent, to US$20.13.
Genentech rose US$1.77, or 2 percent, to US$92.63 after The Wall Street Journal reported the company is close to striking a deal for a US$95-per-share sale to Switzerland's Roche, the company's cancer drug partner. On Friday, Roche increased its bid to US$93 per share, or US$45.7 billion, after its US$86.50-per-share offer failed to gain shareholder support. The companies have been going back and forth since July, when Genentech rejected a US$89-per-share bid as too low.
Among financials, Bank of America jumped 61 cents, or 19.4 percent, to US$3.75. Wells Fargo & Co. rose US$1.36, or 15.8 percent, to US$9.97.
General Electric Co. rose after a spokesman for the conglomerate confirmed that its GE Capital lending arm is selling debt under a federal liquidity program. The company, which often trades in line with financial stocks, rose 35 cents, or 5 percent, to US$7.41.
Capital One Financial Corp. became the latest bank to slash its dividend, following JPMorgan Chase & Co., Wells Fargo & Co. and others. The lender said it will reduce its payout by 87 percent to 5 cents to help preserve capital. Capital One rose 42 cents, or 5 percent, to US$8.73, after falling to US$7.80, a new 52-week low.
Investors also awaited news about the nation's automakers. Members of the Obama administration's auto task force are scheduled to meet with General Motors Corp. and Chrysler LLC executives yesterday in the Detroit area and tour their facilities.
The government could recall its US$17.4 billion in loans to GM and Chrysler if they fail to sign deals for debt restructuring and other concessions from stakeholders by March 31. GM and Chrysler are seeking US$21.6 billion in additional aid to execute turnaround plans submitted last month.
GM rose 23 cents, or 15.9 percent, to US$1.68. Chrysler isn't publicly traded.
Wall Street closed down more than 1 percent yesterday as uneasiness about the economy eclipsed a bounce in troubled financial stocks and news of a big drug company merger. Stocks rose in the early going but eventually turned lower in a now familiar pattern where short-lived bursts of optimism give way to concerns about the country's economic woes.
Financial stocks rose on a news report that Bank of America Corp. could raise capital in the private sector. Shares of major banks have been pummeled to multiyear lows amid growing concern that they don't have enough cash to cover future losses despite multiple government rescues.
"Any bank right now that can raise money in the private sector, that is a major positive for the market," said Quincy Krosby, chief investment strategist at The Hartford. "It's another way to raise capital rather than the government infusing capital into the banks."
But remarks from billionaire investor Warren Buffett added to an overall downbeat mood. He said during an appearance on CNBC that the economy had "fallen off a cliff" over the past six months. He noted that consumers have changed their habits in remarkable ways.
Investors even wrote off rare dealmaking as moves borne more of necessity than opportunity as drugmakers Merck and Schering-Plough announced plans to combine in a $41 billion deal.
"Any type of news we get, the market is just skeptical," said Jon Biele, head of capital markets at Cowen & Co. "There is nothing in the near term that is going to ratchet us to a different higher level."
The Dow Jones industrial average fell 79.89, or 1.2 percent, to 6,547.05.
The Standard & Poor's 500 index fell 6.85, or 1 percent, to 676.53, while the Nasdaq composite index fell 25.21, or 2 percent, to 1,268.64.
The Russell 2000 index of smaller companies fell 7.79, or 2.2 percent, to 343.26.
About five stocks rose for every two that fell on the New York Stock Exchange, where volume came to 1.56 billion shares.
Both the Dow and the S&P 500 have fallen more than 25 percent this year. The Dow is at its lowest level since the spring of 1997, and the S&P 500 is at its lowest point since the fall of 1996.
The Nasdaq, meanwhile, is at a six-year low.
"There is really not very much for the market to sink its teeth into," said Steve Sachs, director of trading at Rockville, Md.-based Rydex Investments.
Investors were unimpressed with Merck & Co.'s offer for Schering-Plough. Merck has offered Schering-Plough shareholders US$10.50 in cash and just over half of one Merck share for each of their shares. The price represents a 34 percent premium to Schering-Plough's closing stock price on Friday. A combination between the two companies had long been speculated.
Merck dropped US$1.75, or 7.7 percent, to US$20.99, while Schering-Plough rose US$2.50, or 14.2 percent, to US$20.13.
Genentech rose US$1.77, or 2 percent, to US$92.63 after The Wall Street Journal reported the company is close to striking a deal for a US$95-per-share sale to Switzerland's Roche, the company's cancer drug partner. On Friday, Roche increased its bid to US$93 per share, or US$45.7 billion, after its US$86.50-per-share offer failed to gain shareholder support. The companies have been going back and forth since July, when Genentech rejected a US$89-per-share bid as too low.
Among financials, Bank of America jumped 61 cents, or 19.4 percent, to US$3.75. Wells Fargo & Co. rose US$1.36, or 15.8 percent, to US$9.97.
General Electric Co. rose after a spokesman for the conglomerate confirmed that its GE Capital lending arm is selling debt under a federal liquidity program. The company, which often trades in line with financial stocks, rose 35 cents, or 5 percent, to US$7.41.
Capital One Financial Corp. became the latest bank to slash its dividend, following JPMorgan Chase & Co., Wells Fargo & Co. and others. The lender said it will reduce its payout by 87 percent to 5 cents to help preserve capital. Capital One rose 42 cents, or 5 percent, to US$8.73, after falling to US$7.80, a new 52-week low.
Investors also awaited news about the nation's automakers. Members of the Obama administration's auto task force are scheduled to meet with General Motors Corp. and Chrysler LLC executives yesterday in the Detroit area and tour their facilities.
The government could recall its US$17.4 billion in loans to GM and Chrysler if they fail to sign deals for debt restructuring and other concessions from stakeholders by March 31. GM and Chrysler are seeking US$21.6 billion in additional aid to execute turnaround plans submitted last month.
GM rose 23 cents, or 15.9 percent, to US$1.68. Chrysler isn't publicly traded.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
