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Closing Market Report
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Financial sector woes raise market’s anxiety
By Joe Bel Bruno
Associated Press
NEW YORK » Wall Street skidded lower yesterday as downbeat news from
JPMorgan Chase & Co. and other financial companies lifted the market's anxiety about the continuing impact of the credit crisis on the economy. The Dow Jones industrials fell nearly 140 points.
The latest reminder of continuing troubles for banks and brokerages came when JPMorgan said late Monday it has incurred wider losses in its mortgage holdings so far in the third quarter than in the second quarter. The nation's second-largest bank by assets said in a regulatory filing it lost $1.5 billion, after hedges, in its mortgage-backed securities and loans this quarter, compared to $1.1 billion in the second three months of 2008.
The losses were proof to investors that the financial sector's problems appear to be nowhere near a resolution.
Meanwhile, Goldman Sachs Group Inc. fell after several analysts lowered their ratings and earnings estimates for the investment bank. And UBS AG, Switzerland's largest bank, reported further losses and write-downs of $5.1 billion during the second quarter.
Oil trading was buffeted yesterday by several factors: differing views on whether global demand is falling or rising, and word from BP PLC that it had shut down an oil pipeline that runs through Georgia as a precautionary measure. Light, sweet crude settled down $1.44 at $113.01 a barrel on the New York Mercantile Exchange.
The price of crude has fallen more than $30 from its July 11 high of $147.27, easing concerns on Wall Street about inflation -- but yesterday, the anxiety over the financial sector overwhelmed any relief about oil prices.
The Dow fell 139.88, or 1.19 percent, to 11,642.47.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 15.73, or 1.21 percent, to 1,289.59, and the Nasdaq composite index fell 9.34, or 0.38 percent, to 2,430.61.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume was virtually unchanged from Monday's 4.98 billion shares.
The Russell 2000 index of smaller companies fell 6.12, or 0.81 percent, to 744.94.
Bond prices rose as stocks fell and investors, once again uneasy about the financial sector, when back in search of safer investments. In late trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.90 percent from 4.00 percent late Monday.
The dollar was higher against most other major currencies, while gold prices fell.
JPMorgan fell $3.90, or 9.3 percent, to $37.99. The stock plunged in late trading after Ladenburg Thalman analyst Richard X. Bove lowered his earnings estimates for the year.
Goldman Sachs declined $11.21, or 6.3 percent, to $166.79 after the analyst downgrades of some of its ratings.
UBS fell $1.34, or 6.2 percent, to $20.35.
