| Another brutal day on Wall Street
The Nasdaq composite fell 2 percent and hit a 10-month low. The Russell 2000 (RUT.X) small-cap index lost 2.8 percent and hit a more than 17-month low. The Russell 2000 has now fallen over 20 percent from its all-time high reached in July of last year. The decline is the technical definition of a bear market. After the close Thursday, IBM (IBM, Fortune 500) reported higher quarterly sales and earnings that topped estimates. In addition, Advanced Micro Devices (AMD, Fortune 500) reported a quarterly loss - narrower than analysts had expected - on higher revenue. Also after the close Thursday, Washington Mutual (WM, Fortune 500) reported a wider quarterly loss that missed estimates, due in part to the weakening value of its mortgage portfolio. Separately, the company is being sued for appraisal fraud.
American Express profit hit hard
AMERICAN Express's fourth-quarter profit dropped 10 per cent, with revenue missing analyst forecasts as customers defaulted more often, fanning worries the credit card and travel services company might struggle as the US economy weakens. Shares of American Express, part of the Dow Jones industrial average, fell $US1.30, or 2.7 per cent, to $US46.10 after-hours, after having risen 4.3 per cent during market hours. Net income for the fourth-largest US credit card issuer declined to $US831 million ($936 million), or 71 US cents per share, from $US922 million, or 75 US cents, a year earlier. Profit from continuing operations was also 71 US cents per share. Analysts on average had expected profit of 71 US cents per share. But net revenue, which rose 10 per cent to $US7.36 billion, was below the average forecast of $US7.78 billion, according to Reuters Estimates.
Shock for food prices as wheat futures rocket
THE price of wheat on the JSE futures exchange broke through R4000 a ton yesterday to a new record on supply concerns, making increases in the price of bread and other foodstuffs inevitable. After hovering around R3900 a ton for some time, the future prices for delivery in May broke the psychological barrier of R4000 a ton, and the price for delivery in July closed at R4000, although it was as high as R4030 during the day yesterday. Wheat prices have now more than doubled from R1878 a ton a year ago, and further increases are expected. Milling and bread companies warned yesterday that with the steep hike in the price of wheat, further increases in the price of bread were unavoidable.
Need to know
Exchange rates Jean-Claude Trichet, President of the European Central Bank, said that he was against "abrupt, rapid and brutal movements" in exchange rates, which were detrimental to growth. The dollar hit record lows against the euro as growing concerns over the American economy strengthened expectations of an interest rate cut. The euro rose above $1.4870. Banking & finance Japanese banks Profits in the Japanese banking sector have taken a 1.2 trillion yen (£5.3 billion) hit from the US sub-prime mortgage crisis and the country’s central bank said worse turmoil may be on the horizon. CIFG Caisse d’Epargne and Banque Populaire, the French mutual banks, pledged $1.5 billion (£730 million) to rescue CIFG, the bond insurer owned by Natixis, the French investment bank, as it was threatened by the US sub-prime mortgage crisis.
Is Gordon as green as he paints himself?
Today in the Lords, the surgeon and health minister Lord Darzi admitted that single sex wards in the NHS is "an aspiration that cannot be met". We'll be asking why the government's given up on such a long held commitment. Simon Enright Permalink Comments (11) .
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