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Overnight Markets: U.S. stocks extend losses on fiscal worries

by Himanshu Singh on Nov 09, 2012 at 03:01

Overnight Markets: U.S. stocks extend losses on fiscal worries

U.S. stocks declined for a second day on Thursday, as the Standard & Poor’s 500 Index had the biggest two-day decline in a year, as investors speculated Greece’s bailout will be delayed and amid worries about Washington's ability to find a timely solution to the "fiscal cliff".

The Dow Jones industrial average lost 121 points, or 0.94%, to end at 12,811. The Standard & Poor's 500 Index fell 17 points, or 1.22%, to 1,378, ending at its lowest level since 2 August. The Nasdaq Composite Index dropped 42 points, or 1.42%, to close at 2,896.

Shares were supported early in the trading day after the U.S. government reported a better-than-expected drop in weekly first-time claims for unemployment benefits as well as a rise in U.S. exports.

But it was soon overshadowed by the concerns that if no deal is reached in Congress over nearly $600 billion in spending cuts and tax increases due to take effect early next year, the struggling U.S. economy could fall into recession.

In Europe, finance ministers may delay a decision to unlock funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said.

McDonald's Corp shares lost 2% after the world's largest hamburger chain reported its first monthly drop in global sales since March 2003. Apple plunged for a second day, with the stock falling 3.6%.

Prudential slumped 4.8% after the Newark, New Jersey-based company cut its projection of annual stock market returns, including dividends, to 8% from 9.25%.

On the positive side, Qualcomm Inc surged 4.4% after the leading supplier of chips for cell phones reported quarterly revenue on Wednesday that beat expectations.

Among other earnings reports, Whole Foods Market Inc slid 5.9% after the company posted earnings that met expectations, but said Hurricane Sandy was a drag on sales this quarter.

After the bell, Groupon lost 16.1% after reporting results that missed expectations.

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