US stocks fall 4% on more bad economic news

15 October 2008 16:29  [Source: ICIS news]

HOUSTON (ICIS news)--US stocks resumed their fall on Wednesday, with the Dow Jones Industrial Average dropping 3.78% - 352.04 points - in early trading following news of sluggish retail sales and weak quarterly earnings from lenders.

The leading stock exchange index stood at 8,958.95 as of 10:54 New York time (14:54 GMT).

Among chemicals, sulphuric acid producer Chemtrade Logistics was one of the few companies to post gains on the New York Stock Exchange, trading at $8.90/share, up 5.45%.

Potash Corporation of Saskatchewan (PotashCorp) had some of the biggest losses, with shares falling to $83.75/share, down 14.54%.

Among the majors, Dow Chemical traded at $24.22/share, down 6.70%. DuPont traded at $34.05/share, down 5.91%.  

The declines followed a report from the National Retail Federation, which said September sales fell 0.7% from last month, once seasons were accounted for. The figures were up 1.4% year on year without seasonal adjustments.

The US Commerce Department said that September retail sales were flat year on year, and they fell 1.2% from August, the federation said.

“With economic concerns weighing down consumers, retailers are facing incredible challenges heading into the fourth quarter,” said Rosalind Wells, the federation's chief economist.

“Retailers are cutting operating costs by whittling back inventory levels and trimming labour costs, but it is nearly impossible for companies to fully counteract a complete pullback in consumer spending," Wells said.

In other news, lender JP Morgan reported third-quarter net profits of $527m, down 85% year on year, while Wells Fargo reported a third-quarter net profits of $1.64bn, down 24% from the year-ago period.

Shares for both lenders changed little in early trading.

To discuss how the financial crisis is affecting the chemicals industry visit this thread on ICIS connect

By: Al Greenwood
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