5 Dec 2008

Job cuts bring Wall St down

12:18 pm on 5 December 2008

Wall Street shares fell hard on Thursday amid of a series of announcements of big job cuts.

The Dow Jones Industrial Average ended down 215.45 points (2.51%) to close at 8,376.24.

The Nasdaq composite was down 46.82 points (3.14%) to 1,445.56. Standard & Poor's 500 was down 25.52 points (2.92%) to 845.22.

AT&T announced it was cutting 12,000 jobs and slashing capital spending due to the economic downturn.

Job cuts were also announced by Viacom and DuPont in North America and Europe.

A government report showed a drop in the number of new unemployment claims in the United States last week, but the level remained high at 509,000.

Grim monthly sales reports were also issued by retailers, with the exception of Wal-Mart.

European markets

European shares ended lower on Thursday despite steep cuts in interest rates by the European Central Bank, the Bank of England and the Riksbank in Sweden.

Market reaction indicated that even more sweeping moves may be needed to halt the worldwide economic slowdown.

The FTSEurofirst 300 index closed 0.4% lower at 826.71 points in choppy trade. The index is down 45% to date this year.

Across Europe: Germany's DAX fell 0.07% and France's CAC 40 was 0.2% lower.

In Britain, the FTSE 100 closed down 6.35 points, or 0.2%, at 4,163.61 points.

In Frankfurt - the DAX index ended at 4564.23 points, down 3.01 or 0.07%. In Paris, the CAC-40 index closed at 3161.16 points, down 5.49 or 0.17%.

The Swiss market index closed at 5649.14 points, up 44.91 or 0.8%.

Rate cuts

The European Central Bank earlier cut its rate by 0.75 percentage points to 2.5%.

Sweden took a record 1.75 percentage points off its policy rate to 2% and the Bank of England cut a percentage point off its base rate to bring it to 2% - the lowest level since 1951.

The Bank of England also warned that further measures would be required to hold the economy back from plunging into a deep recession.