Financials, Transportation, Retailers Drop

123jump.com Staff
11 Jul, 2008
New York City

U.S. stocks fell sharply after investors feared worsening financial health of two government sponsored mortgage lenders Fannie and Freddie. Both lenders dropped as much as 40%. Lehman Brothers dropped 15% to a 9-year low. Anheuser Busch and InBev NV have entered in merger talks and InBev has lifted its offer price to $70 per share. Retailers, consumer driven stocks and transportation stocks fell sharply.

[R]1:45 PM New York – Investors fear that a government bailout of two largest mortgage lenders may not include shareholders. Fannie and Freddie lost 30% of its market value. Crude oil reaches another intra-day record high.[/R]

Dow Jones Industrial Average declined 186.85 or 1.66% to 11,042.17 and S&P 500 declined 19.60 or 1.56% to 1,233.79. Rising crude oil prices, worries related to the health of two government chartered lenders, Fannie and Freddie and General Electric earnings dominated trading sentiment.

Dow Gainers & Losers

Of the 30 stocks in Dow Jones Industrial Average 2 stocks gained, 26 declined and 2 remained unchanged.

AIG led the decliners in the Dow Jones Industrial Average with a loss of 6.42% or $1.54, to $22.45 followed by losses in Bank of America of 4.83% or $1.08, to $21.28, in JPMorgan Chase of 3.54% or $1.22, to $33.29, in Chevron Corp of 3.37% or $3.24, to $93.01 and in United Tech Corp of 3.36% or $2.09, to $60.08.

General Electric led the gainers in the Dow Jones Industrial Average index with a rise of 1.34% or $0.37, to $28.01 followed by increases in Alcoa Inc of 0.58% or $0.20, to $28.01.

Stock Movers

Chevron Corporation fell $4.17 to $92.07 after it reported that second quarter earnings may be lower on higher than expected losses in its refining operations. The oil exploration and refining company expects earnings to be higher than $5.13 billion that it reported in the first quarter. Chevron received 20% higher crude oil prices in April and May compared to prices in first quarter of this year. Chevron Group ((CVX)) in the last one year traded as high as $103.09 in May 2008 and as low as $79.74 in February 2008. Based on the yesterday’s closing price the company has a market cap of $79.74 billion.

Deckers Outdoor Corp fell $12.80 or 10.4% to $110.50 on weak retailers in trading today. Deckers Outdoor Corp ((DECK)) in the last one year traded as high as $164.91 in December 2007 and as low as $87.84 in August 2007. Based on the yesterday’s closing price the company has a market cap of $87.84 billion.

Freddie Mac plunged to twenty year low after investors feared that government bailout of mortgage lender will not include shareholders. Freddie Mac ((FRE)) in the last one year traded as high as $64.89 in August 2007 and as low as $8.00 in July 2008. Based on the yesterday’s closing price the company has a market cap of $3.30 billion. Fannie Mae lost nearly 30% of its value.

Anheuser Busch rose $4.93 or 9% after it initiated talks with InBev NV, a Brazilian and Belgian brewer. The company is reported to have increased its offer price to $70 a share. Anheuser Busch Co ((BDU)) in the last one year traded as high as $65.73 in July 2008 and as low as $45.68 in May 2008. Based on the yesterday’s closing price the company has a market cap of $46.91 billion.

S&P 500 Index Movers

Of the stocks in S&P 500 index, 64 increased 433 declined and 3 remained unchanged.

Freddie Mac led the decliners in the S&P 500 index with a loss of 44.88% or $3.59, to $4.41 followed by in losses in Fannie Mae of 42.88% or $5.66, to $7.54, in Lehman Bros Holdings of 15.09% or $2.61, to $14.69, in Sovereign Bancorp of 13.30% or $0.96, to $6.26 and in Ashland Inc of 11.94% or $5.66, to $41.75.

Hercules Inc led the gainers in the S&P 500 index with a rise of 26.23% or $4.37, to $21.03 followed by increases in Anheuser Busch of 7.17% or $4.39, to $65.60, in Jacobs Engineering Group of 4.44% or $3.32, to $78.11, in Molson Coors of 3.48% or $1.85 to $54.95, and in Newmont Mining of 3.29% or $1.62 to $50.80.