New York: The Dow industrials sank to their lowest close in three months on Wednesday after slipping below 12,000 for the first time since mid-March, as worries about a weak economy compounded credit sector concerns and drove shares of banks, autos and transportation companies sharply lower.
Triggering fears of a slowing economy, FedEx Corp, forecast dismal profits as rising fuel costs could sap demand. Shares of the package delivery company, closely watched by Wall Street as a proxy for US business activity, fell 2.1 per cent to $82.60 on the New York Stock Exchange.
Adding to the bleak outlook for bank stocks, Fifth Third Bancorp sank 27 per cent to $9.26 and ranked among the Nasdaq's biggest percentage losers. The Midwestern bank said it would cut its dividend and raise $2 billion in capital, stirring fears that the credit crisis was tightening its grip on commercial banks.
A 2 per cent rise in oil prices above $136 a barrel compounded concerns about rising raw material costs.
The Dow fell to an intraday low at 11,993.64 -- its lowest level since the Federal Reserve's mid-March rescue of Bear Stearns rattled investors who were already worried about the health of the banking sector.
"The autos, financials and transport sectors are very sensitive to the perception that economic growth is waning," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston. "We've had little evidence the economy is at (its) bottom."
Worries were surfacing over the reading of the US second-quarter gross domestic product, due in July, he said. A Reuters poll of economists see the GDP's growth rate slowing to an annual pace of 0.2 per cent in the second quarter, which would be the weakest since 2002.
The Dow Jones industrial average .DJI tumbled 131.24 points, or 1.08 per cent, to 12,029.06 -- its lowest close since March 17.
The Standard & Poor's 500 Index .SPX fell 13.09 points, or 0.97 per cent, to 1,337.81. The Nasdaq Composite Index .IXIC dropped 28.02 points, or 1.14 per cent, to 2,429.71.
Shares of General Motors Corp fell 5.9 per cent to $14.89, ranking as the Dow's biggest per centage loser. GM touched $14.75, its lowest level since the recession of 1982.
Shares of rival Ford Motor Co fell 5.8 per cent to $6.22 on the NYSE.
GM's stock fell after Deutsche Bank cut the industry-wide outlook, saying leading indicators pointed toward continued 'recessionary levels' of demand.
The KBW index .BKX, which includes money-center banks like Bank of America, slid 4.2 per cent to an intraday low at 62.36, its lowest since October 2002, after Fifth Third's plan prompted investors to dump other banks' shares.
At the close, the KBW bank index was down 2.9 per cent at 63.21.
Bank of America shares lost 3 per cent to $28.37 on the New York Stock Exchange, while SunTrust Banks , a regional bank company whose stock is also in the KBW index, sank 9 per cent to $36.95 in NYSE trading.
Shares of FedEx rival UPS dropped 2.3 per cent to $65.80.
A rare bright spot was provided by Boeing , whose shares rose 0.4 per cent to $74.65 after the US Government Accountability Office, a nonpartisan auditing arm of Congress, recommended the Air Force reopen a competition to award a refueling tanker program, potentially worth $35 billion.
In February, the Air Force awarded the contract to rival Northrop Grumman Corp and its European partner EADS. Shares of Northrop fell 1.4 per cent and stock of EADS, the parent of Airbus, fell 3.4 per cent to 13.55 euros.
Only four of the Dow's 30 components finished higher, with Boeing leading that list.
US crude oil for July delivery CLc1 rose $2.67 to settle at $136.68 a barrel, up 2 per cent for the day.
Trading was moderate on the New York Stock Exchange, with about 1.28 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.07 billion shares traded, below last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by a ratio of about 5 to 2 on both the NYSE and the Nasdaq.
Triggering fears of a slowing economy, FedEx Corp, forecast dismal profits as rising fuel costs could sap demand. Shares of the package delivery company, closely watched by Wall Street as a proxy for US business activity, fell 2.1 per cent to $82.60 on the New York Stock Exchange.
Adding to the bleak outlook for bank stocks, Fifth Third Bancorp sank 27 per cent to $9.26 and ranked among the Nasdaq's biggest percentage losers. The Midwestern bank said it would cut its dividend and raise $2 billion in capital, stirring fears that the credit crisis was tightening its grip on commercial banks.
A 2 per cent rise in oil prices above $136 a barrel compounded concerns about rising raw material costs.
The Dow fell to an intraday low at 11,993.64 -- its lowest level since the Federal Reserve's mid-March rescue of Bear Stearns rattled investors who were already worried about the health of the banking sector.
"The autos, financials and transport sectors are very sensitive to the perception that economic growth is waning," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston. "We've had little evidence the economy is at (its) bottom."
Worries were surfacing over the reading of the US second-quarter gross domestic product, due in July, he said. A Reuters poll of economists see the GDP's growth rate slowing to an annual pace of 0.2 per cent in the second quarter, which would be the weakest since 2002.
The Dow Jones industrial average .DJI tumbled 131.24 points, or 1.08 per cent, to 12,029.06 -- its lowest close since March 17.
The Standard & Poor's 500 Index .SPX fell 13.09 points, or 0.97 per cent, to 1,337.81. The Nasdaq Composite Index .IXIC dropped 28.02 points, or 1.14 per cent, to 2,429.71.
Shares of General Motors Corp fell 5.9 per cent to $14.89, ranking as the Dow's biggest per centage loser. GM touched $14.75, its lowest level since the recession of 1982.
Shares of rival Ford Motor Co fell 5.8 per cent to $6.22 on the NYSE.
GM's stock fell after Deutsche Bank cut the industry-wide outlook, saying leading indicators pointed toward continued 'recessionary levels' of demand.
The KBW index .BKX, which includes money-center banks like Bank of America, slid 4.2 per cent to an intraday low at 62.36, its lowest since October 2002, after Fifth Third's plan prompted investors to dump other banks' shares.
At the close, the KBW bank index was down 2.9 per cent at 63.21.
Bank of America shares lost 3 per cent to $28.37 on the New York Stock Exchange, while SunTrust Banks , a regional bank company whose stock is also in the KBW index, sank 9 per cent to $36.95 in NYSE trading.
Shares of FedEx rival UPS dropped 2.3 per cent to $65.80.
A rare bright spot was provided by Boeing , whose shares rose 0.4 per cent to $74.65 after the US Government Accountability Office, a nonpartisan auditing arm of Congress, recommended the Air Force reopen a competition to award a refueling tanker program, potentially worth $35 billion.
In February, the Air Force awarded the contract to rival Northrop Grumman Corp and its European partner EADS. Shares of Northrop fell 1.4 per cent and stock of EADS, the parent of Airbus, fell 3.4 per cent to 13.55 euros.
Only four of the Dow's 30 components finished higher, with Boeing leading that list.
US crude oil for July delivery CLc1 rose $2.67 to settle at $136.68 a barrel, up 2 per cent for the day.
Trading was moderate on the New York Stock Exchange, with about 1.28 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.07 billion shares traded, below last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by a ratio of about 5 to 2 on both the NYSE and the Nasdaq.
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