US stocks slump over bleak corporate outlookDecember 30th, 2008 - 9:14 am ICT by IANS
New York, Dec 30 (DPA) US stocks fell, as a volatile year for the markets draws to a close, amid concerns over bleak corporate news and tensions in the Middle East and South Asia.A $17.4-billion deal between Kuwait’s state-run Petrochemical Industries Co and Dow Chemical Co, the largest US chemical maker, fell through. The joint venture would have enabled Dow to acquire rival Rohm & Haas, the world’s largest maker of acrylic paint ingredients.
The collapse of the Dow venture Monday led to worries that companies will be unable to complete deals in the beginning of the new year as credit dries up.
“The potential financing problems for Dow Chemical are causing people some concern,” John Carey, who runs the $4.62-billion Pioneer Fund, told Bloomberg news agency. “That could create some problems for other deals in the works.”
Meanwhile, investors were concerned that fresh tensions in the Middle East and between India and Pakistan could destabilise overseas markets.
As Israeli airplanes continued to pound the Gaza Strip, there was a brief rally in the oil market. Chevron Corp rose after oil gained 6.1 percent to $40.02 a barrel, over fears that the conflict would disrupt crude production and supplies in the region.
The markets were up Friday, buoyed by automobile and oil shares and defying gloomy retail reports.
But Monday, the Dow Jones Industrial Average of blue chip stocks dropped 31.62 points, or 0.37 percent, to 8,483.93. The broad-based S&P 500 fell 3.38 points or 0.39 percent to 869.42. The Nasdaq high tech index shed 19.92 points or 1.30 percent, to 1,510.32.
The US currency gained against the euro to 71.81 euro cents from 71.15 euro cents Friday. The dollar remained unchanged against the Japanese currency at 90.67 yen from Friday.