bleak new data from Americas manufacturing sector, Wall Street
stumbled yesterday as the US central bank, the Federal Reserve,
sat down for a two-day meeting that may conclude with yet another
cut in interest rates.
Economists expect the Fed to lower its benchmark overnight rate,
currently set at 1 per cent, by a quarter or half of a percentage
point, but they said they doubted another rate cut would have much
immediate impact on stock markets or the mentality of shell-shocked
The Dow Jones industrial average fell 65.15 points, or 0.8 per cent,
to close at 8,564.53. The broader Standard & Poors 500-stock
index lost 1.3 per cent, while the technology-heavy Nasdaq composite
index dropped 2.1 per cent.
Two new reports showed that industrial production in New York State
and across the country continued to slide in the last months of
the year, and that businesses were bracing for a slow 2009.
Goldman Sachs, which is expected to end an 80-year string of positive
earnings today by posting its first quarterly earnings loss, fell
more than 2 per cent in afternoon trading. Shares of Morgan Stanley,
which is expected to post a quarterly loss of 37 cents a share tomorrow,
fell 1.4 per cent.
Shares of General Motors and the Ford Motor Company both enjoyed
a rebound on yesterday, after the Bush administration said last
week that it was prepared to intervene to prevent the collapse of
the Big Three car companies after Republican senators blocked a
rescue plan. Investors fear that a collapse of the automakers would
have dire repercussions for companies around the world.
In Europe, markets finished lower. The FTSE 100 index in London
and the DAX in Frankfurt closed down slightly while the CAC 40 in
Paris lost 0.87 per cent.
Markets in Asia shrugged off gloomy economic data to advance. In
Tokyo, the benchmark Nikkei 225 average rose 5.2 per cent, while
the S&P/ASX 200 in Sydney gained 2.3 per cent. The Hang Seng
index in Hong Kong rose 1.9 per cent, while the Shanghai Stock Exchange
composite index advanced 0.5 per cent.
(The New York Times)