Stocks fell on Thursday after disappointing results from Comcast (CMCSA.O) and engine maker Cummins (MNI.N) caused investor worry regarding corporate profitability. Not only that, but economic reports on housing, manufacturing, and employment data painted a picture of a weaker economy; while a surge in oil prices contributing to the sour mood on Wall Street.
American International Group, Inc (AIG.N) also contributed to the economy by closing in the red on market rumors that the insurance company may be facing a large securities write-down. However, AIG stock retracted their previous loss after CNBC reported that the rumors were “simply not true”, which helped the Dow and the S&P claw back some of their losses late in the session, as did a 2.4 percent rise in Microsoft.
Merrill Lynch (MER.N) also announced $7.9 billion of credit write-downs. According to Kurt Brunner, a portfolio manager at the Swarthmore Group, “Concerns over subprime issues are continuing to bang around out there, and you’ve seen earnings which have been coming in mixed, so that is weighing on investor sentiment. There were rumors AIG may take a big write-down. Given what Merrill said yesterday about the size of the write-down, people are nervous and you are going to have these rumors.”
At the end of the day, the DJIA closed in the red by .33 points, or 0.02 percent, to end at 13,671.92. The Standard & Poor’s 500 Index (.SPX) was down 1.48 points, or 0.10 percent, at 1,514.40. The Nasdaq Composite Index (.IXIC) was down 23.90 points, or 0.86 percent, at 2,750.86.
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