Banks Drop, Research in Motion Plunges

123jump.com Staff
26 Sep, 2008
New York City

U.S. stocks edged lower after lawmakers debate alternatives to the proposed bailout plan from the U.S. administration. Washington Mutual, 120-year old bank was seized and sold by the Federal regulators to JP Morgan. Morgan Stanley, Wachovia and Goldman Sachs dropped. Research in Motion plunged 25%.

[R]11:00AM New York – Nervous investors stay on the sidelines as lawmakers haggle on the scope and size of the bank bailout plan.[/R]

U.S. benchmarks opened lower and quickly declined 1% after more lawmakers voiced their dissatisfaction with the proposed bailout plan. Several Republican members are proposing an alternative plan that does not taxpayer’s capital at risk but will extend insurance to banks and financial institutions through FDIC. The Federal Deposit Insurance Corporation insures $1.3 trillion of bank deposits with $45 billion of capital.

The Commerce Department reported lowered its estimate of second quarter economic growth to 2.8% from 3.3%.

Research In Motion Limited plunged $24.88 to $72.64 after it reported weaker than expected earnings. Revenue for the fiscal 2009 second quarter was $2.58 billion, up 15% from $2.24 billion in the previous quarter and up 88% from $1.37 billion in the same quarter of last year. The company added 2.6 million net new BlackBerry subscribers with a total of 19 million.

Washington Mutual plunged dropped $1.53 to 16 cents after the thrift was seized by the Fed regulators and sold to JP Morgan. The depository institution was seized after it suffered withdrawals of $16.7 billion since Sept 15.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 113.37 or 0.94% to 11,893.16, Hang Seng index in Hong Kong decreased 252.34 or 1.33% closed to 18,682.09. CSI 300 index in China higher 20.12 or 0.91% closed to 2,243.66. ASX 200 index in Australia decreased 22.60 or 0.46% to close 4,904.80. The KL Composite index in Malaysia lower 4.21 or 0.41% closed to 1,020.53.

The Kospi Index in South Korea decreased 25.30 or 1.68% to close at 1,476.33, SET index in Thailand closed lower 2.17 or 0.35% to 618.97 and JSE Index in Indonesia decreased 23.97 or 1.28% to 1,846.09. The Sensex index in India decreased 445.00 or 3.28% closed to 13,102.18.

Europe Markets Review

In London FTSE 100 Index traded lower 104.90 or 2.02% to 5,092.10, in Paris CAC 40 Index decreased 80.50 or 1.90% to 4,146.31 and in Frankfurt DAX index traded lower 123.82 or 2.01% to 6,049.21. In Zurich trading SMI decreased 152.29 or 2.19% to 6,793.20.