US stock indexes sink in midday trading; big banks fall

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Stocks are down
Stocks are down
US stocks are down Thursday

MATTHEW CRAFT, AP Business Writer

NEW YORK (AP) — Disappointing results from Bank of America, Citigroup and other companies led the stock market lower Thursday. Target rose after the retailer announced plans to close down stores in Canada.

KEEPING SCORE: The Dow Jones industrial average was down 60 points, or 0.3 percent, to 17,367 as of 11:40 a.m. Eastern time. The Standard & Poor’s 500 index fell 10 points, or 0.5 percent, to 2,000. The Nasdaq composite dropped 34 points, or 0.7 percent, to 4,605.

TURBULENT TIMES: Discouraging news on the global economy and falling oil prices have rattled markets over recent weeks. But reports on the U.S. economy remain encouraging. Last week, the government said that the unemployment rate declined to 5.6 in December, a six-year low. On Thursday, the New York branch of the Federal Reserve reported increased manufacturing in the region.

ONE VIEW: “Lately, it has kind of been the economy versus the markets,” said Jack Ablin, the chief investment officer at BMO Private Bank. “There’s a divergence. The financial markets are worried about the impact of plunging oil prices, at the same time the economic backdrop in the U.S. is improving.”

PINCHED PROFITS: Weak revenue from trading and lending helped pull Bank of America’s profits down 11 percent in the fourth quarter. The bank’s results for both revenue and earnings fell short of Wall Street’s estimates. BofA’s stock sank 55 cents, or 3 percent, to $15.49.

CITI: Citigroup sank $1.40, or 3 percent, to $47.65 following news that the bank’s quarterly profit fell 86 percent. The bank booked big legal and restructuring charges at the end of last year to cover costs tied to a number of investigations. Analysts had expected stronger results.

OVER THERE: In Europe, France’s CAC 40 climbed 2.2 percent, while Germany’s DAX gained 2 percent. Britain’s FTSE 100 rose 1.4 percent.

SWISS ROCKET: The Swiss national bank rocked currency markets on Thursday when it abandoned its efforts to keep the franc artificially low against the euro. The Swiss franc soared in response. But Swiss stocks took a pounding on the prospect of more expensive exports.

In other trading, the dollar fell to 117.04 yen from 117.49 yen late Wednesday, while the euro fell to $1.1631 from $1.1789.

ANOTHER TAKE: “Volatility continues to show its hand, although this could be the new normal,” said IG strategist Chris Weston in a market commentary. “Markets continue to grapple with falling inflation, spiraling commodities, crazy bond yields, political uncertainties and ultimately a market that feels central banks have no juice to meet their mandates.”

INDIA: The Reserve Bank of India cut its key interest rate Thursday in a surprise move to revive Asia’s third-biggest economy. The decision to lower the rate to 7.75 percent, announced more than two weeks before the central bank’s planned monetary policy review on Feb. 3, follows several months of declines in India’s stubbornly high inflation rate. The Sensex stock index in Mumbai soared 2.6 percent.

ASIA’S DAY: Japan’s Nikkei 225 jumped 1.9 percent. China’s Shanghai Composite surged 3.5 percent, and Hong Kong’s Hang Seng rose 1 percent.

LATER, EH: Target said it’s closing its stores in Canada, saying that the company was unable to find a realistic scenario for the division to turn a profit before 2021. It’s the first major move by the retailer’s new CEO, Brian Cornell. Target’s stock rose $2.62, or 3 percent, to $76.85.

FALLING HARD: Radio Shack’s stock lost 30 percent following a report in the Wall Street Journal that the struggling electronics retailer could file for bankruptcy protection as early as February. The report said that Radio Shack is also talking to a private-equity firm about a sale of its assets. The company’s stock fell 13 cents to 28 cents.

BONDS: Bond price rose. The yield on the 10-year Treasury note fell to 1.80 percent from 1.86 percent.

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