Earning warnings shake sentiments at Wall Street
Stocks at Wall Street ended lower on Monday, 12 January, 2009. Earning warnings sent US stocks lower today ahead of Alcoa's earnings report scheduled after today's close. Energy sector and the financial sector led the declines. The weakness was broad based in the overall market. A bit of late support kept stocks from closing at their session lows. Still, losses were deep and broad-based, extending last week's declines.
On Wall Street, the Dow Jones industrial average ended lower by 125 points at 8,474, the Nasdaq closed lower by 33 points at 1,538 and the S&P 500 closed lower by 20 points at 870.
Nine of the ten sectors ended in the red today led by the financial sector.
Twenty-five out of thirty Dow stocks ended in the red today led by Citigroup and Alcoa. IBM tried to support the Dow.
Alcoa was a laggard in the materials sector after being downgraded to Sell by Deutsche Bank.
IBM tried to support the Dow today after incurring losses in previous four sessions. IBM reports its latest quarterly results next week.
Citigroup was also a cause of weakness in the market today. The stock lost 17% today itself. The company is reportedly nearing a deal in which it will sell a majority stake of its brokerage, Smith Barney, to Morgan Stanley. As per reports, Morgan Stanley would pay Citi between $2.5 billion and $3.5 billion cash. The extra cash would help stem Citi's losses.
On Monday, crude-oil futures for light sweet crude for February delivery closed at $37.59/barrel (lower by $3.24 or 7.9%) on the New York Mercantile Exchange. Earlier during the day, prices fell to a low of $37.48. Last week, crude prices shed 12%.
At the currency market on Monday, the dollar was up against most major counterparts. The U.S. dollar rose against the euro on expectations that the European Central Bank will cut its key interest rate later this week. The ECB's key lending rate stands at 2.5%.
Volume on the New York Stock Exchange exceeded 1.3 billion, and decliners outpaced advancers more than 3 to 1. On the Nasdaq, more than 688 million shares traded and decliners routed advancers 4 to 1.
Tomorrow, there are two economic reports due - November Trade Balance at 8:30 AM ET and the December Monthly Budget Statement (Dec.) at 2:00 PM ET. Other than that, Fed Chairman Bernanke Fed Chairman Bernanke's lectures at London School of Economics at 8:00 AM ET will garnet attention.
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