US Stocks Drop on Financial Sector Concerns
April 8, 2009 (New York): US stocks have moved back suddenly on constant worries related to the condition of financial institutions staggering from anxiety and chaos at the beginning of the earnings season for the first quarter.
At 15:40 GMT, The Dow Jones Industrial Average (DJIA) Index dropped 131.26 points (1.65%) to 7,844.59 points, shifting away from the 8,000 level that the index crossed in the previous week.
The Standard & Poor’s 500 Index dropped 11.08 points (1.33%) to 824.40 points and the tech-dominated NASDAQ Composite Index fell 22.77 points (1.42%) to 1583.94.
Traders mentioned that the market was shaky prior to the reporting season for earnings for the first quarter which commences subsequent to market closing today with Alcoa, which is a Dow Jones Component and prominent aluminum company.
Wall Street anticipates a huge loss for the company in the middle of diminishing values for aluminum on feeble demand as a result of acute global financial meltdown.
The worries for financial sector sped up following a newspaper statement emphasized on non-performing asset troubles hassling companies.
As per the Times of London, fresh estimates from the IMF ((International Monetary Fund) are indicating that toxic debts accumulated by insurance companies and banks might move up to $4 trillion.
In January, the IMF stated that it anticipated the decline in US-sourced assets to attain $2.2 trillion by the close of 2010. However, it is known to be considering to increase that to $3.1 trillion in its upcoming evaluation of the global economy that is going to be released shortly, the report stated.
Military-related stocks came under spotlight one day after the declaration made by Robert Gates, the Defense Secretary, that his proposed budget would intensely restructure military expenditures, asking for reductions in principal weapons programs like F-22 fighter jets.
Boeing dropped 2.65% to $37.15 since the budget might jeopardize its missile defense and fighter jet programs.
Financial institutions like Bank of America was leveled at $7.48, JPMorgan Chase slumped 2.45% to $27.51 and CitiGroup gained 1.84% to $2.77.
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