Tuesday, April 28, 2009

Wall Street Declines On Bank Report, Bank of America Plunges

. Tuesday, April 28, 2009

By stockOzone team

US stocks retreated on Tuesday on renewed worries over the health of nation's banking system. Shares came under pressure following reports that U.S. regulators have asked Bank of America Corp. and Citigroup Inc. that they may need to raise more capital. The Dow Jones Industrial Average dropped 8.05 points or 0.10% to finish at 8,016.95. The S&P 500 fell 2.35 points or 0.27% to end at 855.16. The Nasdaq Composite declined 5.60 points or 0.33% to 1,673.81.

Shares of US banks were crushed on Tuesday. According to reports, U.S. regulators have told Bank of America Corp. (NYSE: BAC) and Citigroup Inc (NYSE: C) that they may need to raise more capital following stress testing of the two banks. Bank of America lost 77 cents or 8.63% to $8.15. Citigroup slumped 18 cents or 5.86% to $2.89. Shares of Wells Fargo (NYSE: WFC) slid 82 cents or 4.04% to $19.48.

The largest US aluminum maker Alcoa Inc. (NYSE: AA) fell 27 cents or 3.07% to $8.52.

Shares of General Motors (NYSE: GM) tumbled 23 cents or 11.27% to $1.81.

IBM (NYSE: IBM) gained $1.99 or 1.99% to $101.94. The software giant said on Tuesday that it will increase its quarterly dividend by 10% and will repurchase an additional $3 billion of its stock.

Meanwhile, the World Health Organization has raised its pandemic alert level from Phase 3 to Phase 4 for the deadly swine flu outbreak, signaling that the infection is spreading fast among humans in community-level outbreaks. Swine flu cases in the U.S. have doubled to 40, and Mexico’s toll of flu-related deaths rose to 152. New Zealand Israel have confirmed its first case of swine flu while there are suspected cases in Australia, France, Spain, Brazil.

Drugmaker Pfier (NYSE: PFE) Inc. said that its first quarter profit fell 2% to $2.73 billion, or 40 cents a share from net income of $2.78 billion, or 41 cents a share, in the prior year quarter. Revenue decreased 8% to $10.9 billion from $11.8 billion. Shares of Pfizer Inc. (NYSE: PFE) finished at $13.39, down 10 cents or 0.74%.

Shares of Bristol-Myers Squibb Co. (NYSE: BMY) fell 89 cents or 4.33% to $19.65 after it reported that net income from continuing operations remained relatively flat at 921 million, or 32 cents a share for the first quarter, compared with $877 million, or 32 cents, in the same quarter a year earlier. On an adjusted basis, the company earned 48 cents a share. Revenue from continuing operations increased 2.5% to $5.02 billion.

Office Depot Inc. (NYSE: ODP) soared 29 cents or 11.46% to $2.82 after it said Tuesday that it swung to a fiscal first-quarter loss of $54.7 million, or 20 cents a share, compared to a profit of $68.8 million, or 25 cents a share, in the comparable quarter last year. Revenue declined 19% to $3.2 billion.

Late on Monday, US Steel (NYSE: X) slashed its dividend by 83%. The steelmaker swung to a first quarter loss of $439 million, or $3.78 a share, compared with net income of $235 million, or $1.98 a share, in the year ago quarter. Revenue tumbled 47% to $2.75 billion from $5.2 billion. Shares of the company plunged $1.56 or 5.63% to $26.15.

On the front of economic data, a release by US Conference Board showed that consumer confidence index jumped to 39.2 in April from 26.9 in March. Economists were looking for a reading of 29.7.

According to the Case-Shiller home price index released by Standard & Poor's, home prices in 20 major cities fell 18.6% in February from the same month last year, compared with a 19% year-over-year decline in January 2009.

European stocks settled with losses. The U.K. FTSE retreated 70.61 points or 1.69% to 4,096.40. The German DAX and French CAC decreased 1.85% and 1.66% respectively.

Asian stocks finished lower. The Nikkei 225 plunged 232.57 points or 2.67% to 8,493.77. The Hang Seng index of Hong Kong fell 285.31 points or 1.92% to 14,555.11.

NYMEX crude oil for May delivery declined 22 cents or 0.4% to settle at $49.92 a barrel.

Disclosure: Author does not own any of the stocks discussed here.

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