12 Dec 2008

Wall St hurt by auto bailout anxiety

11:14 am on 12 December 2008

Stocks in the United States fell on Thursday on dimming prospects for an automaker bailout.

The day was governed by a steady stream of dismal corporate and economic news. The S&P financial sector index dropped 8.5% in the third consecutive day of losses for the financial sector.

A bailout for the auto industry seems dead.

The White House has urged Senate Republicans to back the $US14 billion financial lifeline, but Republicans appear to have more than enough votes to stop the bailout with a procedural roadblock.

The Dow Jones industrial average fell 196.33 points, or 2.24%, to 8,565.09. The Standard & Poor's 500 Index slid 25.65 points, or 2.85%, to 873.59. The Nasdaq Composite Index lost 57.60 points, or 3.68%, to 1,507.88.

After the bell, Bank of America Corp announced it plans to cut about 30,000 to 35,000 jobs over the next three years.

Volume was moderate on the New York Stock Exchange, where about 1.47 billion shares changed hands - below last year's estimated daily average of 1.90 billion.

About 2.05 billion shares traded, below last year's daily average of 2.17 billion on the Nasdaq.

Banking stocks down

European shares also ended lower on Thursday, as banking stocks continued to weaken.

HBOS fell 2.6%, Royal Bank of Scotland was down 3.5%, Lloyds TSB fell 5.5% and Commerzbank was down 2.4%.

The FTSEurofirst 300 index of top European shares closed 0.7% lower at 853.81 points. It has lost more than 43% to date this year.

Across Europe: the German DAX index was down 0.8% and France's CAC index was down 0.4%.

The Swiss market index closed at 5,729.85 points, down 22.06 or 0.38%.

In Britain, the FTSE 100 closed up 0.5% or 21.41 points at 4,388.69. The index is down 32% for the year.