Markets stumble on poor outlook
NEW YORK – Wall Street ended its worst January ever by stumbling again over the banking system and the economy.
The major indexes all fell sharply for the second straight day, leaving the Dow Jones industrial average and Standard & Poor’s 500 index with record percentage drops for January – 8.84 percent and 8.57 percent, respectively. Some market watchers believe that’s a bad omen for the rest of the year, as the market usually ends a year down after having fallen in January.
Volatility was high this week, with the market zigzagging on a mix of earnings and economic news as investors tried to determine what the rest of 2009 will bring. It was the market’s fourth straight losing week.
The Dow Jones industrial average closed the week down 76.70, or 0.90 percent, at 8,000.86. The Standard & Poor’s 500 index fell 6.07, or 0.70 percent, to 825.88. The Nasdaq composite index lost 0.87, or 0.10 percent, closing at 1,476.42.
The Russell 2000 index, which tracks the performance of small company stocks, fell 0.83, or 0.17 percent, to 443.53.
The Dow Jones Wilshire 5000 Composite Index – a free-float weighted index that measures 5,000 U.S. based companies – ended at 8,335.64, down 49.49 points, or 0.59 percent, for the week. A year ago, the index was at 14,091.09.
Friday’s corporate earnings reports were anything but encouraging.
Evidence that consumers are cutting back on even the most basic of items came as Procter & Gamble Co. said sales in the fourth quarter dipped 3 percent on weakening demand for its products – which include Tide detergent, Olay skin cream and Crest toothpaste. The company also lowered its earnings projections for the full year, and said it expects sales to fall in the current quarter.
Meanwhile, two of the country’s largest oil companies reported feeling the pain of sinking oil prices. Exxon Mobil Corp. said that it surpassed its own record for annual earnings by a U.S. company last year, but saw a big drop in profit during the fourth quarter. Chevron Corp.’s fourth-quarter results also suffered from the late-2008 plunge in oil prices.
Honda Motor Co. slashed its 2009 profit target by more than half as its earnings dropped 90 percent in the latest quarter.
“The market is a forward-looking indicator, but the market sees nothing good in front of us,” said Stu Schweitzer, global markets strategist at J.P. Morgan’s Private Bank.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.85 percent from 2.87 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, dipped to 0.22 percent from 0.23 percent.
© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.