US stocks drop on disappointing earnings
Wall Street stock indices fell Wednesday amid poor company earnings and concerns that the largest US banks will need fresh injections of government money to weather the ongoing US recession, dpa reported.
Shares of Walt Disney Co were down 7.9 per cent after the second- largest US media firm reported a 32-per-cent decline in first-quarter profits. Kraft Foods Inc saw its shares tumble 9.2 per cent after the country's second-largest food producer lowered its quarterly earnings forecast.
Financial shares fell 1 per cent, led by an 11-per-cent drop at Bank of America Corp, the country's largest bank by assets. Last month, the firm posted its first quarterly loss since 1991.
Bank of America chief executive Kenneth Lewis said that his recovery plans for the company have been endorsed by the board of directors, in a memo to employees and reported Wednesday by the Bloomberg financial news agency.
In response to the continuing banking woes, US President Barack Obama next week will unveil a series of new programmes to help stabilize the US financial system.
Industry group ADP Employer Services said that US firms slashed 522,000 jobs in January, following 2.6 millions jobs lost in 2008. The government releases monthly unemployment figures on Friday.
The blue-chip Dow Jones Industrial Average tumbled 121.7 points, or 1.51 per cent, to 7,956.66. The broader Standard & Poor's 500 Index fell 6.28 points, or 0.75 per cent, to 832.23. The technology- heavy Nasdaq Composite Index edged down 1.25 points, or 0.08 per cent, to 1,515.05.
The US currency rose against the euro to 77.81 euro cents from 76.79 euro cents on Tuesday. The dollar edged lower against the Japanese currency to 89.48 yen from 89.52 yen.