US stocks waver on stimulus concerns

US stocks waver on stimulus concerns
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First Published: Tue, Feb 10 2009. 08 49 AM IST
Updated: Tue, Feb 10 2009. 08 49 AM IST
New York: US stocks wavered and oil prices slipped on Monday as concerns about weak demand and fears that Washington’s plans to heal the US economy might prove insufficient turned markets lower.
Downbeat broker comments on consumer companies and more dismal earnings reports led the Dow lower and offset hopes that US President Barack Obama’s plan to bail out the ailing US financial sector will spare shareholders.
Oil also turned lower late in the day as a weak outlook for US fuel demand outweighed expectations. Congress will pass an $800 billion economic recovery package and talk of supply cuts by the Organization of Petroleum Exporting Countries (Opec).
“The recession argument is winning out time and time again,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
“In the case of the OPEC cuts, we’re starting to see them, but they still have some ways to go,” he said. “In terms of the effect of the stimulus package, that’s not something that’s going to be seen in the real economy until the late third quarter or fourth quarter (of 2009) at the soonest.”
US crude for March delivery settled at $39.56, down 61 cents. London Brent settled at $46.02, down 19 cents.
The dollar fell as expectations Congress will approve the stimulus plan this week helped ease risk aversion while the benchmark S&P 500 stock index to closed slightly higher.
The dollar fell against a basket of major currencies, with the US Dollar Index down 0.58% at 84.794.
Gold futures ended below $900 an ounce and world stocks as measured by MSCI’s all-country index rose slightly on hopes for a stimulus plan.
A newly energized Obama launched a new drive to win the stimulus plan’s passage, flying to Elkhart, Indiana, to make his case to residents of a city where the unemployment rate has soared to 15.3% from 4.7% a year ago.
Focus on the stimulus package led the administration to postpone Treasury Secretary Timothy Geithner’s much-awaited announcement of a bank rescue plan until Tuesday. However, analysts said it’s unclear how much it will boost stocks.
Shares of leading soft drink makers Coca-Cola and Pepsi Co fell after broker downgrades by Goldman Sachs and Citigroup on each company’s respective price target.
The Dow Jones industrial average closed down 9.72 points, or 0.12%, at 8,270.87. The Standard & Poor’s 500 Index rose 1.29 points, or 0.15 percent, at 869.89. The Nasdaq Composite Index fell 0.15 points, or 0.01%, at 1,591.56.
Earlier, European shares rose for the fourth session in five, wiping out almost all year-to-date losses in an index of top regional shares.
In Europe a rise in bank stocks was supported by better-than-expected results at Barclays, which rose 10.9% after posting a £6.1 billion ($9 billion) profit and saying credit market losses were waning.
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First Published: Tue, Feb 10 2009. 08 49 AM IST
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