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Recession worry, data outweigh good earnings

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NEW YORK - U.S. stocks slid on Wednesday as investors worried that efforts to ease the credit crisis would not avert a recession, overshadowing solid profits from Coca-Cola Co and Intel Corp.

Published: Wed 15 Oct 2008, 9:40 PM

Updated: Sun 5 Apr 2015, 2:19 PM

  • By
  • (Reuters)

Investors' mood soured when a government report showed that sales at U.S. retailers last month slid by the biggest monthly drop in more than three years. Consumer spending accounts for two-thirds of U.S. economic activity.

Investors sold shares of economic bellwethers, including Caterpillar Inc , which fell 8 percent. Energy companies were another casualty as oil prices slid. Chevron fell more than 6 percent.

U.S. crude for November delivery fell about 4 percent to $75.61 a barrel on the view that a recession would hurt energy demand.

"I think people are realizing there are interesting tools being put in place to deal with the credit crisis, but there's going to be a lag time to get them to work," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

The Dow Jones industrial average slid 347.03 points, or 3.73 percent, to 8,963.96. The Standard & Poor's 500 Index

tumbled 43.99 points, or 4.41 percent, to 954.02. The Nasdaq Composite Index dropped 53.96 points, or 3.03 percent, to 1,725.05.

Coca-Cola, the world's largest soft-drinks maker, posted a third-quarter profit above Wall Street's forecasts, sending shares 6 percent higher to $46.36.

Intel Corp's shares rose 2.5 percent to $16.33. The chip maker posted a stronger-than-expected quarterly profit late on Tuesday. ID:nN14239388.

But investors fear the credit crisis has already done enough damage to the economy, making it unlikely that policy measures to unfreeze lending would prevent a recession.

Financial shares fell after an influential bank analyst at Oppenheimer & Co, said U.S. banks were not out of the woods despite the government's plan to stabilize key players by investing $250 billion.

Goldman Sachs fell 3.4 percent to $118.88, while Bank of America shares declined 3.2 percent to $25.70.

Shares of State Street Corp , one of the world's biggest institutional asset managers, tumbled more than 10 percent to $50.75. The company said it moved forward the release of its results and received some of the $250 billion the U.S. Treasury is investing.

Bucking the trend, JPMorgan Chase rose 1.4 percent to $41.46. The bank said quarterly profit fell 84 percent due to mark-downs on underperforming loans, but its adjusted loss beat Wall Street's estimates.

Caterpillar shares fell to $43.75 on the New York Stock Exchange. Chevron declined to $62.57.

Among retailers, Wal-Mart fell 3.5 percent to $52.56, while Target Corp slid 5.2 percent to $37.71. On Nasdaq, Qualcomm , a supplier of chips for cell phones and other technologies, were down nearly 4 percent at $38.78.



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