US stocks slump on Citigroup worries, Intel warning

European shares fell as worries about credit-market turmoil depressed sentiment across the region.

By NEWS AGENCIES
March 5, 2008 09:49
3 minute read.

SHARES TEL AVIV The Tel Aviv-25 Index fell to the lowest in more than three weeks, losing 5.51, or 0.5 percent, to 1,072.73 at the close in Tel Aviv, as 17 members dropped, seven gained and one was unchanged. Alvarion fell for a fourth day, declining 3.3%. The maker of broadband wireless technology reportedly failed to win a contract to provide wireless high-speed Internet technology to a group led by KDDI Corp., Japan's second-biggest cellphone operator. Israel Chemicals rose to the highest in three days, climbing 1%. The company that extracts minerals from the Dead Sea to make fertilizers climbed after Jim Cramer reportedly recommended shares of Potash Corp. of Saskatchewan, the world's largest maker of crop nutrients, and Mosaic, the world's largest producer of phosphate fertilizer, in his Mad Money show on CNBC. Mizrahi-Tefahot Bank gained the most in 15 days, advancing 1.8%. Israel's fourth-largest bank reportedly may buy the half of Bank Yahav that it doesn't already own. Teva Pharmaceutical Industries fell to an eight-day low, declining 1.7%. The world's biggest maker of generic drugs has been sued by Abbott Laboratories and Elan Corp. to block it from selling a generic version of the cholesterol drug TriCor. The two contend that Teva's generic would infringe on their patents for the drug. WALL STREET Stocks tumbled Tuesday as troubling outlooks for Citigroup and Intel again underscored for investors that US companies, led by the financial sector, are getting hit by a weak economy. The major indexes each gave up more than 1%, with the Dow Jones industrial average falling more than 170 points. Merrill Lynch has reduced its full-year earnings prediction for Citigroup because it believes the bank could write down another $18b. of debt tied to souring mortgages, according to Dow Jones Newswires. The stock, one of the 30 companies in the Dow, fell to new nine-year lows, and took other financial stocks down with it. Intel, meanwhile, lowered the forecast for its first-quarter profit margins, a move that heightened worries about the technology industry. Chipmakers are considered an early warning system for troubles throughout the sector. The Dow Jones industrial average fell 176.82, or 1.44%, to 12,082.08. Broader stock indicators also lost ground. The Standard & Poor's 500 Index fell 17.27, or 1.30%, to 1,314.07, while the Nasdaq composite index declined 25.80, or 1.14%, to 2,232.80, reflecting concerns about the hi-tech sector following Intel's news. EUROPE European shares fell as worries about credit-market turmoil and more potential asset write-downs depressed sentiment across the region, with auto and technology shares taking the brunt of the selling. The pan-European Dow Jones Stoxx 600 Index dipped 1.3% to 310.26, moving back from early gains. Of national indexes, the DAX 30 Index fell 2.2% to 6,545.04, the French CAC-40 Index slipped 1.4% to 4,675.91 and the UK FTSE 100 Index closed down 0.9% to 5,767.70. ASIA Asian stocks fell for a fourth day on concern record commodity prices and credit-market losses will erode earnings. Most Asian benchmarks declined. Japan's Nikkei 225 Stock Average was little changed at 12,992.28 after swinging between a gain of 0.9% and a loss of 0.8%, while the broader Topix fell 0.4%. CURRENCIES The shekel snapped three days of declines, rising the most in three weeks to 3.5965 per dollar, from 3.6560 on Monday, when it dropped to the lowest level in two weeks. It has gained 6.1% this year, making it the third-best performer among 11 emerging-market currencies in Europe, the Middle East and Africa. It climbed to a 10-year high of 3.5325 per dollar on February 12.The dollar fell for a sixth straight day against the yen, approaching a three-year low, as traders increased bets that the Federal Reserve will lower interest rates by 0.75 percentage point this month. The dollar fell to 102.83 yen at 11:14 a.m. in New York, from 103.49 yen Monday, when it touched 102.62 yen, the lowest since January 28, 2005. The dollar traded at $1.5199 per euro, from $1.5204 Monday, when it touched $1.5275, the weakest level since the euro's 1999 debut. COMMODITIES Commodities plunged the most in almost six weeks, as oil, gold and corn fell from record highs, on renewed concern that a slowing US economy will curb demand for raw materials. Crude-oil futures for April delivery slipped 2.1% to $100.27 a barrel on the New York Mercantile Exchange. The price touched $103.95 on Monday, the highest ever. Gold fell as lower energy prices eroded the metal's appeal as an inflation hedge. The metal for April delivery dropped 1.7% to $967.50 an ounce after reaching a record $992 on Monday.


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