US REPORT: Dow Jones:8,025.00 (–51.29) SP 500:857.50 (–8.73) Nasdaq:1,679.41 (–14.88)
US STOCKS fell yesterday on concerns the spreading of a new strain of swine flu could dampen optimism about the economy, overshadowing a sweeping overhaul of General Motorsand gains in biotechnology stocks.
The three major US stock indexes slid in choppy trade as governments around the world moved to contain the spread of a swine flu outbreak that has killed 149 people in Mexico and spread to the US and Canada.
The Amex Airline Index dropped 10.6 per cent as investors worried that travel would be hit hard by the flu fears.
Among the laggards, UAL,the parent of United Airlines, plummeted 14.3 per cent to $5.50, while Continental Airlineslost 16.4 per cent to $11.08.
Anxiety about the flu hammered the entire transport sector and the Dow Jones Transportation Average sank 4.7 per cent even as recent data has suggested the recession could be abating and quarterly earnings have been less disappointing than Wall Street expected.
“The market looks for things to worry about, particularly when you are up nearly 30 per cent from the bottom,” said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas.
However, the worries were tempered as GM shares surged 20 per cent to $2.04 after the troubled auto-maker announced a restructuring that investors hope will keep the company alive as it tries to secure government funding.
On Nasdaq, cell-phone chip supplier Qualcommwas a bright spot, up 4.4 per cent at $43.17 after it swung to a quarterly loss, but raised its full-year revenue target on signs of market improvement.
Chevronand Exxon Mobilalso weighed on the blue-chip Dow as June oil futures slid nearly 3 per cent on flu worries. Chevron fell 1.8 per cent to $65.41, and Exxon lost 0.7 per cent to $66.13.
In contrast, stocks of drugmakers benefited from the threat of a flu pandemic. Gilead Sciencesclimbed 3.8 per cent to $47.53 on Nasdaq.
Skittishness over what a government stress test of 19 major US financial institutions might reveal pressured financial stocks. Wells Fargofell 5.1 per cent to $20.30 after influential analyst Richard Bove downgraded the bank's stock to "hold" from "buy". – (Reuters)
