Wednesday, May 20, 2009

Wall Street Slumps On Fed Outlook, HP Tumbles

. Wednesday, May 20, 2009

By stockOzone team

US stocks finished lower on Wednesday after minutes from the last FOMC meeting showed that officials expects a deeper recession in 2009, a slower recovery next year, a greater rise in unemployment, and a possible need to expand the quantitative easing program. The Dow Jones Industrial Average fell 52.81 points or 0.62% to finish at 8,422.04. The S&P 500 shed 4.66 points or 0.51% to end at 903.47. The Nasdaq Composite slipped 6.70 points or 0.39% to 1,727.84.

The Fed now expects the gross domestic product to shrink between 1.3% and 2% in 2009. It had earlier expected only a 0.5% to 1.3% decline. The central bank now expects the unemployment rate to increase to between 9.2% and 9.6% this year. In January it had forecast that the jobless rate would be in a range of 8.5% to 8.8%. Few fed officials also suggested that they were open to increasing its purchases of Treasury notes and mortgage securities in order to boost lending.

Shares of financials finished lower. Citigroup (NYSE: C) declined 8 cents or 2.12% to $3.69. J.P Morgan (NYSE: JPM) plunged $1.26 or 3.52% to $34.55. American Express (NYSE: AXP) lost 81 cents or 3.27% to $23.98. Shares of Wells Fargo & Co.(NYSE: WFC) slumped 99 cents or 3.89% to $24.46.

However, Bank of America (NYSE: BAC) bucked the trend and its shares climbed 24 cents or 2.13% to $11.49. Bank of America announced on Wednesday that in less than two weeks, it has raised $13.5 billion by issuing 1.25 billion shares at an average price of $10.77 each.

Shares of General Motors (NYSE: GM) jumped 18 cents or 14.17% to $1.45.

Among energy stocks, Exxon Mobil (NYSE: XOM) dropped 91 cents or 1.29% to $69.61. Chevron Corp. (NYSE: CVX) retreated 65 cents or 0.99% to $65.21.

Shares of McDonald's (NYSE: MCD) jumped $2.38 or 4.42% to $56.25.

Early on Wednesday, Target Corp. (NYSE: TGT) announced that its first-quarter profit slipped to $522 million, or 69 cents a share, from $602 million, or 74 cents, in the corresponding quarter last year. Revenue climbed 0.2% to $14.8 billion while comparable-store sales declined 3.7%. Shares of the retailer rose $1 or 2.38% to $42.94.

BJ's Wholesale Club Inc. (NYSE: BJ) plunged $1.69 or 4.44% to $36.37 after it said that its first-quarter profit rose 42% to $24.3 million, or 45 cents a share, from $17.2 million, or 29 cents a share, in the prior year quarter. Revenue climbed 0.2% to $2.26 billion from $2.25 billion.

Shares of Deere Co. (NYSE: DE) increased 51 cents or 1.16% to $44.31 after it reported that its fiscal second-quarter profit fell 38% $472.3 million, or $1.11 a share. That's down from $763.5 million, or $1.74 per share, in the year earlier quarter. Revenue declined 17% to $6.75 billion.

Late on Tuesday, the world's largest PC maker Hewlett Packard (NYSE: HPQ) announced that its second quarter net income fell 17% to $1.7 billion, or 70 cents a share, from $2.1 billion, or 80 cents a share, in the year ago quarter. Revenue dropped 3% to $27.4 billion. H.P. also said that it would eliminate 2 percent of its 321,000 work force, or close to 6,420 people, in order to cut costs. Shares of HP sank $1.91 or 5.22% to $34.67.

Luxury homebuilder Toll Brothers Inc (NYSE: TOL) said that it expects to report a 51% decline in second-quarter homebuilding revenue. Shares of the company finished at $18.98, down 53 cents or 2.72%.

Shares of The Home Depot (NYSE: HD) slid 80 cents or 3.25% to $23.83.

Elsewhere, Japan's gross domestic product shrank at an annual pace of 15.2% in the January-March period, the fastest pace since 1955, the government said Wednesday.

European stocks settled mostly higher. The UK FTSE fell 13.84 points or 0.31% to 4,468.41. The German DAX lost 0.02% while French CAC increased 1.60% and 0.87%.

Asian stocks finished mixed. The Nikkei 225 rose 54.35 points or 0.59% to 9,344.64. The Hang Seng index of Hong Kong fell 68.19 points or 0.39% to 17,475.84.

NYMEX crude oil for May delivery climbed $1.94 or 3.2% to settle at $62.04 a barrel.

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

Bookmark and Share


Post a Comment

Visit to discover Indian blogs