US stocks fall as Morgan Stanley reports sharp lossesDecember 18th, 2008 - 9:15 am ICT by IANS
New York, Dec 18 (DPA) US stocks fell as investors grappled with investment bank Morgan Stanley’s sharp fourth-quarter losses, and over concerns that the Federal Reserve had few tools left to combat the recession.Wednesday’s dip was almost expected, after stocks rallied Tuesday after the Fed cut interest rates to a historic low and promised to use “all available tools” to stabilise the financial system.
It slashed its federal funds rate to an unprecedented “target range” of 0-0.25 percent, the first time it has not set an exact rate, in a bid to revive the US economy.
Morgan Stanley also reported reductions in year-on-year income for the business year that ended Nov 30, continuing the fallout from the economic crisis.
In the final quarter, the company reported a loss of $2.2 billion from continuing operations, compared with a $3.6-billion loss for the fourth quarter in 2007. It reported net income for the year of $1.7 billion, compared to $3.2 billion a year ago.
Morgan Stanley is one of the two major investment banks to have survived Wall Street’s September meltdown as an independent company. However, the financial crisis forced them to reinvent themselves as bank holding companies.
Shares of Apple were down some seven percent in early trading amid investor concerns that undisclosed health problems were the behind iconic chief executive Steve Jobs’ decision not to address the MacWorld Expo next month.
Jobs, 53, has given the keynote address at the past 11 Macworlds, but the company announced Tuesday that it would end its participation after the Jan 6 expo in San Francisco.
Speculation that Jobs’ health was behind the decision sent Apple’s stock down to around $89.16 per share Wednesday, down 6.6 percent from $95.43 at the close of trade Tuesday.
The blue-chip Dow Jones Industrial Average fell 99.80 points, or 1.12 percent, to 8,824.34. The broad-based Standard and Poor’s 500 shed 8.76 points, or 0.96 percent, to 904.42. The technology-heavy Nasdaq Composite Index dropped 10.58 points, or 0.67 percent, to 1,579.31.
The US currency fell to 69.42 euro cents from 71.22 euro cents Tuesday. It also dropped against the Japanese currency, to 87.26 yen from 88.95 yen Monday.