Stocks waver on more government and financial news
Stocks teetered this morning after a 400-point rally yesterday, as more companies reported third-quarter earnings and the government announced more plans to try to stimulate the economy, the Associated Press reported.
The Dow Jones industrial average was down 0.16 percent to 9,250.38 in the first hour of trading, after falling more than 100 points but also jumping into positive territory. Meanwhile, the Standard & Poor’s 500 index was down 0.26 percent to 982.86 and the Nasdaq composite index was down 0.24 percent to 1,765.77.
As of 11:20 a.m., the Dow was down nearly 220.86 points to 9,044.57.
But stocks could see a boost today as the federal government discusses further steps to help the economy, including a second stimulus package. Today the Federal Reserve said it would start buying commercial paper, a crucial short-term credit source that allows many companies to fund day-to-day operations, from money market mutual funds.
Bank-to-bank lending also seems to be thawing out as the London Interbank Offered Rate (Libor) dropped 0.23 percentage points on a three-month loan to 3.83 percent, its lowest level in more than a month.
In addition to DuPont’s revised fourth-quarter forecast, Caterpillar Inc. announced that its third-quarter profits fell 6 percent due to higher raw material costs, which offset record global sales.
More earnings reports showed technology and regional banks falling short of analysts’ estimates, Bloomberg reported. Texas Instruments Inc.’s stock price fell 7.7 percent and Sun Microsystems Inc. fell 12 percent after both companies predicted lower sales. U.S. Bancorp said today that its third-quarter profits fell 47 percent to $576 million, or 32 cents per share, from $1.1 billion, or 62 cents per share, a year earlier, due to hits on investments and increases in its provisions to cover credit losses.
Meanwhile, light sweet crude fell to $72.53 a barrel on the New York Mercantile Exchange after rising slightly yesterday following an announcement by the president of the Organization of the Petroleum Exporting Countries that the organization was planning to cut production to stop falling prices.