US stocks fall as quarterly earnings reports filed

October 23rd, 2008 - 2:54 am ICT by IANS  

Washington, Oct 23 (DPA) Wall Street indices continued their decline in midday trading Wednesday, adding to the gloomy mood on European markets as US investors reacted to depressed earnings reports.Wall Street opened down 2.5 percent and stocks slid in Asia, Europe’s blue-chip Stoxx 50 index dropped 5 percent to 2235 in late trading as concerns set in about the outlook for the global economy and profits.

By 1900 GMT, the blue-chip Dow Jones index had fallen 411.62 points, or 4.56 percent, to 8,622.04. The broader based S&P 500 had shed 48.61 points, or 5.09 percent, to 906.44. The high tech Nasdaq lost 64.09 points, or 3.78 percent, to 1,632.59.

The credit freeze, which has prompted massive government interventions in the US and Europe, thawed a little more on Wednesday.

The London interbank offered rate, or Libor, for three-month loans in dollars slid 29 basis points to 3.54 percent Wednesday, falling for the eighth day as central banks offered cash to revive lending, Bloomberg financial news service reported.

But the Libor was still higher than the US central bank’s target rate for overnight loans of 1.5 percent.

In company news, Wachovia Corp, the troubled bank being acquired by Wells Fargo & Co, reported $24 billion in losses in the third quarter - one of the the highest for any bank since the financial crisis began more than a year ago.

Aerospace giant Boeing reported third-quarter earnings had dropped 38 percent as the company was hit by the costs of a protracted machinists’ strike.

The US pharmaceutical concern Merck & Co said it would cut 7,200 jobs, or 12 percent of the workforce, as third quarter earnings fell 2 percent, to $5.9 billion.

There was good news for US telecoms AT&T, Philip Morris tobacco company and the fast food chain McDonald’s.

Although AT&T rode demand for the Apple iPhone to increased profits, it was less than analysts had expected - only a 6 percent gain to $3.2 billion.

Philip Morris, maker of Marlboro cigarettes, did good business in Eastern Europe and emerging economies, boosting earnings to $2.1 billion, a 20-percent climb from the same period last year, the company said Wednesday.

McDonald’s, the world’s largest restaurant company, reported an 11 percent rise in third quarter profits to $1.19 billion, boosted by consumers seeking cheaper food on the dollar menu of the Golden Arches. Europe outpaced US demand for McDonald’s products, the company said Wednesday.

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