Dow industrials are set to drop 500
Updated: 2008-01-22 21:11
Last week, each of the major US indexes fell more than 4 percent as investors grew skeptical late in the week that plans by US lawmakers and President Bush to stimulate the US economy will keep the US from tipping into recession. The plan Bush announced Friday, which requires the OK of Congress, outlines $145 billion in tax relief to help spur consumer spending.
Bond prices rose sharply as investors searched for safety amid the global stock pullback. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.49 percent from 3.63 percent late Friday.
The dollar was mixed against other major currencies.
Corporate news weighed on stocks as well as concerns about the widespread pullback in stocks.
Bank of America Corp. said its fourth-quarter earnings fell sharply amid credit losses and weak investment banking results. Profits at the bank declined to $268 million, or 5 cents per share, from $5.26 billion, or $1.16 per share, a year earlier.
Meanwhile, Wachovia Corp. said its fourth-quarter earnings fell 98 percent after the bank wrote down $1.7 billion in the value of certain portfolios and set aside $1.5 billion to cover bad loans. Earnings fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, a year earlier.
There was some good news. DuPont, one of the 30 stocks that make up the Dow industrials, said its fourth-quarter profits fell 37 percent from a year ago when earnings benefited from one-time items. Earnings fell to $545 million, or 60 cents per share, from $871 million, or 94 cents per share, in the year-ago period. But excluding items, results topped Wall Street's expectations amid strength in its international business.
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