US stocks continue fall as Dow average sheds 3%

16 October 2008 16:31  [Source: ICIS news]

HOUSTON (ICIS news)--US stocks on the Dow Jones Industrial Average continued falling on Thursday, losing 254 points - or 3% - in early trading.

Initially, the average rose as much as 143, hitting 8,720, before losing all of the gains and reaching 8,324 at 10:58 New York time (14:58 GMT).

The Dow is one of several world indexes to fall.

London's FTSE 100 index opened around 5% down from Wednesday's close taking it below the 4,000 mark, its lowest point in five years, and at 15:21 GMT was trading 6.18% down .

Germany's Dax index was down 5.56%, while in Paris the CAC was down 6.87%.

In Japan, the Nikkei 225 index posted its biggest one-day drop since the 1987 crash, falling 11.41%.

Among US chemicals, paint producer Sherwin-Williams saw one of the largest rises - 6.33% - to reach $52.55 (€38.36).

Although Sherwin-Williams reported a 11.5% drop in third-quarter net profits, its performance still beat expectations, according to a research note by JP Morgan.

Similarly, shares rose 3,56% to reach $46.08 for paint and chlor-alkali producer PPG Industries - after that company reported a 39% drop in third-quarter net income.

PPG's performance also beat expectations, according to a research note by Bank of America.

Some of the largest share losses were posted by Solutia, which fell 9.15% to reach $7.15.

Among the majors, Dow Chemical shares rose 0.27% to reach $22.37, while DuPont rose 0.12% to reach $32.24/share. 

Stocks moved following news that US manufacturing activity will fall over the next six months, according to the Manufacturers Alliance.

The group reported the lowest index of production expectation since 2001.

The alliance said its latest quarterly survey of senior financial officers in companies representing a broad range of manufacturing shows a reduction in the September composite index to 48 from 50 reported in the previous survey in June. 

The nation's consumer prices remained mostly flat in September, the US Labor Department said.

On Wednesday, the Federal Reserve released its "Beige Book", which indicated that economic activity fell in much of the US, while chairman Ben Bernanke warned that the nation's economic crisis will drag on for many months.

In addition, the US Department of Commerce reported weak September retail sales.

($1 = €0.74)

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By: Al Greenwood
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