While you were sleeping: Wall St slips on earnings

While you were sleeping: Wall St slips on earnings, CIT amends debt swap

Oct. 19 (BusinessWire) – Stocks fell in Europe and the U.S. on Friday as General Electric, America’s biggest corporate, and Bank of America posted disappointing earnings, stoking fears more companies will have a lacklustre third quarter.

World stocks fell and the euro retreated against the U.S. dollar on Friday as weak results from General Electric Co and Bank of America Corp dimmed confidence in a profit-driven economic recovery.

GE posted a 42% decline in earnings and Bank of America posted a loss.

GE was down 4.2% to US$16.08 and BoA fell 4.6% to US$17.26.

The Dow Jones Industrial Average fell 0.7% to 9995.91 and the Standard & Poor’s 500 declined 0.8% to 1087.68. The Nasdaq Composite dropped 0.8% to 2156.80.

International Business Machines (IBM) fell about 5% to US$121.64 after managers at the company were among executives at major firms and a hedge fund charged with the biggest-ever hedge fund insider-trading scheme.

The insider trading case centres on billionaire Raj Rajaratnam, the founder of the Galleon Group hedge fund firm, who was caught allegedly insider trading with the help of federal wiretaps.

In Europe, the Dow Jones Stoxx 600 fell 0.7% to 245.58. The U.K.’s FTSE 100 fell 0.6% to 5190.24 on Friday, Germany’s DAX 30 fell 1.5% to 5743.39 and France’s CAC 40 fell 1.5% to 3827.60.

CIT Group fell 5.1% to US$1.12 after the century-old lender amended the terms of a $29 billion debt swap, gaining the support of bondholders to swap their notes for new ones with a shorter maturity. It will also extend the offer.

The euro slipped 0.3% to $1.4903 and edged up 0.1% to 135.42 yen. The dollar strengthened 0.4% to 90.87 yen.

Crude oil touched its highest levels in a year after figures showing a lift in U.S. industrial production and after the Energy Department said stockpiles of gasoline fell by 5.23 million barrels last week.

Crude oil for November delivery rose 1.2% to US$78.53 a barrel on the New York Mercantile Exchange on Friday.

U.S. industrial output rose more than expected last month, adding to optimism about an economic recovery.

Production rose 0.7% in September, beating expectations and rounding out the third month of gains.

Gold for December delivery rose 90 cents to US$1,051.50 an ounce in New York.

(BusinessWire)

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