Credit and economic woes sink Wall Street

Ellis Mnyandu
Reuters
Tuesday December 4, 2007

U.S. stocks fell for a second straight day on Tuesday on concerns about the impact of the credit crisis on bank profits and the wider economy.

In a sign of growing unease about the credit squeeze and fallout from the housing slump, JPMorgan Chase (JPM.N: Quote, Profile, Research) slashed its earnings outlook for four major Wall Street banks, fueling another sell-off in financial shares.

Shares of credit card company American Express (AXP.N: Quote, Profile, Research) and of Goldman Sachs Group Inc (GS.N: Quote, Profile, Research), the largest U.S. securities firm, led financials lower.

Home builders were another casualty, with the Dow Jones home construction index .DJUSHB sliding nearly 3 percent.

"The head wind for the market is the credit problem," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.

"The other problems are all secondary to that one. If it weren't for the credit mess, I don't think we'd be talking about recession and be so focused on the Fed, and we wouldn't be worried about earnings."

Full article here.



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