US stocks drop on worsening outlook for banks, industry

March 27th, 2008 - 5:13 am ICT by admin  

New York, March 27 (DPA) US stocks declined Wednesday amid increasingly gloomy forecasts on bank profits and a drop in demand for durable goods. Financial stocks retreated after an Oppenheimer & Co analyst said commercial bank Citigroup’s first-quarter loss would be four times worse than expected, according to Bloomberg News.

The Federal Reserve has opened up new lending avenues to investment banks in a bid to curb losses from the financial and credit crisis, but Treasury Secretary Henry Pauls said the Fed’s measures should be accompanied by greater oversight of the financial sector.

Industrial shares dropped on a government report of a slump in demand for new machinery orders, an area of the economy that investors had hoped was immune from the wider economic slowdown.

The blue-chip Dow Jones Industrial Average lost 109.74 points, or 0.0.88 percent, to 12,422.86. The broader Standard & Poor’s 500 Index was down 11.86 points, or 0.88 percent, to 1,341.13. The technology-heavy Nasdaq Composite Index dropped 16.69 points, or 0.71 percent, to 2,324.36.

The US currency fell against the euro to 63.10 euro cents from 63.91 euro cents Tuesday. The dollar dipped against the Japanese currency to 99.16 yen from 99.98 yen Tuesday.

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