06 May 2010 23:13 [Source: ICIS news]
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HOUSTON (ICIS news)--Chemical stocks took their lumps on Thursday following a near 1,000-point freefall in the US Dow Jones Industrial Average amid Wall Street worries over the Greek debt crisis.
The Dow closed down closed down by 347.80 points (3.2%) on Thursday after partially recovering from the massive dive.
"It was kind of one of those chain reactions, when participants in the market start seeing crazy, crazy downward moves," said Hassan Ahmed, head of research for Alembic Global Advisor.
As selling pressure increased, chemicals companies were particularly exposed, since they were tied to GDP growth and early-cycle recovery, Ahmed said.
"I don't think it had much to do with fundamentals," Hassan said.
Indeed, many chemical companies reported strong first-quarter earnings and gave optimistic outlooks for the year.
"Literally, I think it was one of those days where you can't really point to any fundamental reason why this happened. It was extreme panic mode," Ahmed said.
Calumet was the biggest loser among US chemicals, falling 13.1%.
Stocks fell as worries persisted about the Greek debt crisis in Europe.
“Uncertainty as to the behaviour of the European Central Bank makes it more difficult to remain confident in an EU recovery, particularly in the countries with the most leverage - both public and private,” said Jefferies & Co analyst Laurence Alexander.
In energy markets, NYMEX light sweet crude for June delivery fell by $2.86 to settle at $77.11/bbl. During the day, crude reached an 11-week low, falling to $76.49/bbl.
The US dollar, meanwhile, continued its gains, rising to €0.79.
Additional reporting by Joe ChangPaul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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