US stocks tumble on GM fate, financial woesMarch 6th, 2009 - 6:42 am ICT by IANS
New York, March 6 (Xinhua) US stocks tumbled with all major indexes losing more than fourpercent Thursday as market speculated that General Motors may face bankruptcy and financial shares sank on downgrading worries.
In a report released Thursday, auditors of General Motors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan.
Financial shares led the way down. Moody’s warned that it would downgrade the credit ratings for Wells Fargo and Bank of America. Wells Fargo shares plunged 15.94 percent and Bank of America tumbled 11.70 percent.
Moreover, shares of Citigroup, once the world’s most valuable bank, plummeted below $1 Thursday, as investors continued to worry about the bank’s health and ability to avert nationalisation.
The US Labour Department said Thursday that productivity, the amount of output per hour of work, fell at an annual rate of 0.4 percent in the fourth quarter, worse than economists’ expectations.
Meanwhile, retail sales improved in February with discounted chain store like Wal-Mart gaining far more than analysts had expected.
The Dow Jones average fell 281.40, or 4.1 percent, to 6,594.44. The S&P 500 index dropped 32.95, or 4.6 percent, to 679.92, the lowest since Oct. 1996. The Nasdaq composite index fell 54.15, or 4 percent, to 1,299.59.