U.S. Stocks Down; GE Sales Fall, BofA Loss

123jump.com Staff
16 Oct, 2009
New York City

U.S. stocks traded lower after weaker than expected earnings from General Earnings and Bank of America. Investors also focused on rising loan losses at BofA and 20% sales decline at GE. AMD fell after it reported a quarterly loss and Google earnings surged 27%.

[R]9:50 AM New York – U.S. stocks traded lower after weaker than expected earnings from General Earnings and a quarterly loss at Bank of America. Investors also focused on rising loan losses at BofA and 20% sales decline at GE. AMD fell after it reported a quarterly loss and Google earnings surged 27%.[/R]

U.S. stocks at the open traded lower after the weak results from Bank of America and General Electric. In the overseas trading, markets in Asia closed lower and European markets trended lower in the late afternoon.

General Electric reported 20% decline in revenues and Bank of America reported a quarterly loss and higher loan loss reserve compared to a year ago. Google earnings surged 27% in the quarter as revenues increased 7.2%.

Investors are awaiting Reuters/University of Michigan Survey on consumer confidence in and expects to an improvement in the latest read.

Stocks in India continued their advance ahead of five days Diwali celebrations as the nation enters into a five days of holidays that end on Tuesday. Sunday marks the beginning of the Hindu New Year 2066.

Tata Consultancy Services Limited, an information technology company said second quarter revenues rose 2.4% to Rs 5,744.4 crore ($1.24 billion) from Rs 5,609.6 crore a year ago. Net profit for the quarter rose 5.6% to Rs 1,347.6 crore ($290 million) compared to net profit of Rs 1,276.4 crore a year ago.

Stocks in Thailand surged after positive comments from finance minister that indicated that sell off in stocks was excessive.

Earnings Review

Advanced Micro Devices, Inc, ((AMD)) the provider of microprocessors said third quarter revenues fell 22% to $1.4 billion from $1.8 billion a year ago. Net loss in the quarter was $128 million or 18 cents per diluted share compared to net loss of $134 million or 22 cents per share a year ago.

Bank of America Corporation, the bank reported third quarter revenues rose 32.7% to $26.04 billion from $19.62 billion a year ago. Net loss in the quarter was $2.24 billion or 26 cents per diluted share compared to net income of $704 million or 15 cents per share a year ago.

The loss is the second quarterly loss in seventeen years after the fourth quarter loss in 2008. The bank set aside $11.7 billion in loan loss reserves, $5.3 billion more than a year ago.

General Electric Company ((GE)) released third quarter revenues fell 20% to $37.8 billion and profit from continuing operations declined 45% to $2.45 billion or 22 cents a share compared to $4.48 billion or 45 cents a share.

Google Inc, ((GOOG)) the search engine said third quarter revenues rose 7.2% to $5.94 billion from $5.54 billion a year ago. Net income in the quarter rose 27% to $1.64 billion or $5.13 per diluted share compared to net income of $1.29 billion or $4.06 per share a year ago.

International Business Machines Corporation, ((IBM)) an IT technology and services provider said third quarter revenues fell 6.7% to $23.6 billion from $25.3 billion a year ago. Net income in the quarter rose 14.3% to $3.2 billion or $2.40 per diluted share compared to net income of $2.8 billion or $2.04 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 18.91 or 0.18% to 10,257.56, Hang Seng index in Hong Kong decreased 69.18 or 0.31% to 21,929.90, and CSI 300 index in China higher 2.07 or 0.06% to 3,241.71. ASX 200 index in Australia decreased 23.50 or 0.48% to 4,836.40. The FTSE Bursa KL Composite index in Malaysia was higher 9.91 or 0.79% to 1,256.77.

The Kospi Index in South Korea decreased 18.63 or 1.12% to close at 1,640.36 SET Index in Thailand closed higher 24.40 or 3.52% to 717.12. JSE Index in Indonesia increased 0.42 or 0.02% to 2,515.81. The Sensex index in India increased 127.62 or 0.74% to 17,322.82.

Europe Markets Review

In London FTSE 100 Index traded lower 6.28 or 0.12% to 5,216.67, in Paris CAC 40 Index decreased 14.46 or 0.37% to 3,869.37 and in Frankfurt DAX index traded lower 5.31 or 0.09% to 5,825.46. In Zurich trading SMI decreased 17.49 or 0.27% to 6,365.70.