Stocks Fall 4%, GM Worries, GE Net Falls

123jump.com Staff
10 Oct, 2008
New York City

Stocks in New York trading continue to slide despite another round of assurances from regulators and President Bush. The Dow and S&P 500 indexes dropped more than 5%. Crude oil plunges more than $5 a barrel. Lehman credit default swap settlement indicates a price of near 90 cents for insurance.

[R]11:40AM New York – U.S. stocks fall more than 4%. Crude oil falls more than 5%. Asian Markets plunge.[/R]

Banks remain focused on counter party risks and are unwilling to lend to each other. The fall of Lehman Brothers has reverberated throughout the short term loan markets. The Libor rate for the dollar deposits rose again 7 points to 4.82% and continues to hover near record levels.

Asian markets plunged in the overnight trading on the fears that the U.S. is sliding into a recession. Markets in Indonesia were closed for the second day in a row. Japan, India, China, Hong Kong, and Australia dropped more than 7%.

Rupee in India dropped to a record low as foreign investors pull money from stocks and crude oil imports remain at elevated level.

Crude oil prices drop as the fears of recession dominate trading. Immediate month crude oil futures fell $5.78 or 6.8% to $80.81 a barrel.

General Motors, Ford and Chrysler may face difficult times as auto sales are expected fall further and companies may have a difficult time raising capital. September auto sales were the lowest level in 15-year at a rate of 12.6 million annual run rate and for the year are expected to be near 13.5 million units. Auto analysts are expecting sales to fall to near 13 million vehicles in 2009. General Motors and Ford rely on the short term commercial paper market to fund day to day needs of the company where rates are on the rise.

General Motors ((GM)) dropped as low as $4 in the morning trading bur recovered to $4.92, up 16 cents. Ford Motor Company ((F)) dropped as low as $2.00 before recovering 31 cents to trade at $2.31. Toyota Motor Corporation ((TM)) declined $2.64 to $59.76 and Honda Motor Company ((HMC)) $1.86 to 19.95.

General Motors 8.375% bond due in 2033 dropped to 18.375 cents to 45.322% yield as reported on the bond market price system available of Financial Industry Regulation Authority.

General Electric Company dropped rose 12 cents to $19.16 after the company reported third quarter revenues increase of 11% to $47.23 billion from $42.51 billion a year ago. Net income in the quarter fell 22% to $4.3 billion or 43 cents per diluted share compared to net income of $5.56 billion or 54 cents per share, a year ago. Income from continuing operations dropped 12% to $4.48 billion or 45 cents a share from $5.11 billion or 50 cents a share.

General Electric Company ((GE)) in the last one year traded as high as $42.09 in October 2007 and as low as $19.00 this month. Based on the yesterday’s closing price the company has a market cap of $199.53 billion.


Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 881.06 or 9.62% to 8,276.43, Hang Seng index in Hong Kong decreased 1,146.37 or 7.19% closed to 14,796.87. CSI 300 index in China lower 88.34 or 4.43% closed to 1,906.96. ASX 200 index in Australia decreased 360.20 or 8.34% to close 3,960.70. The KL Composite index in Malaysia lower 34.88 or 3.60% closed to 934.01.

The Kospi Index in South Korea decreased 53.42 or 4.13% to close at 1,241.47. SET index in Thailand closed lower 48.03 or 9.61% to 451.96. The Sensex index in India decreased 800.51 or 7.07% closed to 10,527.85. Market of Indonesia was closed today.

Europe Markets Review

In London FTSE 100 Index traded lower 346.60 or 8.03% to 3,967.20, in Paris CAC 40 Index decreased 264.06 or 7.67% to 3,178.64 and in Frankfurt DAX index traded lower 396.83 or 8.12% to 4,490.17. In Zurich trading SMI decreased 413.07 or 7.12% to 5,385.77.