U.S. Stocks Fall

U.S. stocks fell and the Standard & Poor’s 500 Index retreated from a five-week high on concern the Federal Reserve has few tools left to combat the recession after cutting its benchmark interest rate to as low as zero.

Newell Rubbermaid Inc., the maker of Calphalon cookware, tumbled the most in at least 28 years as the shrinking economy forced it to reduce its 2008 profit forecast. Apple Inc. slid 6.6 percent after the maker of the iPhone said Chief Executive Officer Steve Jobs won’t speak at the Macworld Expo, spurring concern the leader’s health is deteriorating. Macy’s Inc. rallied 18 percent, helping trim the market’s losses, after lenders relaxed terms on a $2 billion credit line.

The S&P 500 lost 1 percent to 904.42. Technology and energy shares were the biggest drag on the index as Apple tumbled and oil slid below $40 a barrel for the first time in four years. The Dow Jones Industrial Average declined 99.8 points, or 1.1 percent, to 8,824.34. The Russell 2000 Index of small U.S. companies added 0.8 percent.

European stocks declined as concern that bank earnings may deteriorate further overshadowed a rally in construction-related companies following the Federal Reserve’s interest-rate cut.

BNP Paribas SA slumped 17 percent after saying losses at its investment bank since October more than wiped out the division’s profit this year. Deutsche Bank AG sank 8.8 percent as it opted not to redeem some bonds, a sign its borrowing costs have soared. CRH Plc, the world’s second-biggest building- materials maker, and Skanska AB rallied more than 3 percent.

The Dow Jones Stoxx 600 Index slipped 0.8 percent to 197.51. The measure is down 46 percent this year as credit losses and writedowns at the world’s largest banks surpassed $1 trillion and the U.S., Europe and Japan entered the first simultaneous recessions since World War II.

National benchmark indexes fell in 10 of the 18 western European markets. The U.K.’s FTSE 100 advanced 0.4 percent. Germany’s DAX fell 0.5 percent, while France’s CAC 40 dropped 0.3 percent.


TradingEconomics.com, Bloomberg
12/17/2008 1:57:13 PM