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US stocks plunge on oil slide

US stocks plunge on oil slide
PTI
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First Published: Fri, Dec 19 2008. 09 06 AM IST
Updated: Fri, Dec 19 2008. 09 06 AM IST
New York: US stocks ended sharply lower on market concerns over a collapse of oil prices and a lowering of American giant General Electric’s credit outlook and that of its financial arm to negative.
The Dow Jones Industrial Average slid 219.35 points (2.49%) on Thursday to close at 8,604.99.
The tech-rich Nasdaq fell 26.94 points (1.71%) to 1,552.37 and the Standard & Poor’s 500 broad-market index retreated 19.14 points (2.12%) to 885.28.
The market opened higher but succumbed to pressure as oil prices tumbled to the lowest points for more than four years and credit ratings agency Standard & Poor’s revised its outlook on General Electric and its financial unit General Electric Capital Corp (GECC) to negative from stable.
“Stocks chopped along in a relatively narrow range until economic bellwether General Electric had its credit outlook lowered late in the session,” said analysts at Briefing.com.
The announcement by S&P induced selling pressure, sending stock prices down by about three per cent before recovering slightly at the close.
The outlook revision reflects the continuing risks posed by GECC’s reliance on confidence-sensitive wholesale funding despite the benefits of temporary US government support programs, S&P said in a statement.
It also highlighted the GECC management’s ongoing efforts to reduce its reliance on commercial paper, strengthen near-term liquidity, downsize the asset base and strengthen capital.
“GECC’s earnings deterioration in 2009 and 2010 could be greater than we previously assumed,” said S&P credit analyst Scott Sprinzen.
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First Published: Fri, Dec 19 2008. 09 06 AM IST