Wall Street lower after disappointing Wal-Mart results, concerns

0 Comments | Deseret News (Salt Lake City), Aug 14, 2007 | by Joe Bel Bruno Associated Press

NEW YORK -- Wall Street pulled back sharply Monday on anxiety about the pace of consumer spending amid disappointing results from Wal-Mart Stores Inc. Speculation that yet another fund is struggling because of weeks of market volatility added to the decline.

The world's biggest retailer cut its profit outlook amid weak economic conditions that are crimping consumer spending. Meanwhile, Home Depot Inc., the world's largest home improvement chain, said Tuesday that weakness in the housing market caused its quarterly profit to slip almost 15 percent.

Exacerbating investors' nervousness was a report by CNBC that money market fund Sentinel Management Group has been having difficulties meeting redemptions for investors, and has asked the government permission to halt them. A telephone call to the company was not immediately returned.

Hedge funds and other big institutional investors have taken a beating in recent weeks due to the market turbulence. On Monday, Goldman Sachs Group Inc. said three funds it manages has had significant losses -- and injected $3 billion in capital to one of them.

Wall Street has been pummeled as a deepening credit crunch has spooked the market, and led to anxiety about potential losses at financial firms and funds. The Federal Reserve, which has injected some $64 billion of liquidity into the U.S. banking system since Thursday, said Tuesday it stood ready to act again should market conditions warrant.

"The market is very, very sensitive at this point, and any news about a potential financial problems is going to effect the way that the market trades," said Scott Fullman, director of investment strategy for I.A. Englander & Co. "We've been seeing extreme sensitivity in the financials, but also in the consumer stocks and industrials during the session."

The European Central Bank injected another $10.5 billion into money markets on Tuesday and said conditions were normalizing after several days of volatility. There was no action Tuesday by the Fed.

In midday trading, the Dow Jones industrial average fell 128.35, or 0.97 percent, to 13,108.18.

Broader stock indicators were lower. The Standard & Poor's 500 index shed 15.07, or 1.04 percent, at 1,437.85, and the Nasdaq composite index fell 18.30, or 0.72 percent, at 2,523.94.

On the Net:

New York Stock Exchange: www.nyse.com

Nasdaq Stock Market: www.nasdaq.com

Copyright C 2007 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.
 

BNET TalkbackShare your ideas and expertise on this topic

Please add your comment:

  1. You are currently: a Guest |
  2.  

Basic HTML tags that work in comments are: bold (<b></b>), italic (<i></i>), underline (<u></u>), and hyperlink (<a href></a)