Finance sector jitters pull down Wall Street

ABS-CBN News

Posted at Jun 18 2008 09:46 PM | Updated as of Jun 19 2008 05:46 AM

Agence France-Presse

NEW YORK - US stocks extended losses at the opening Wednesday after a sharp drop in earnings reported by investment bank Morgan Stanley reinforced the negative mood a day after a sharp selloff.

The Dow Jones Industrial Average dropped 51.13 points (0.42 percent) to 12,109.17 in the first exchanges after a slide of more than 100 points on Tuesday.

The tech-dominated Nasdaq composite shed 13.01 points (0.53 percent) to 2,444.72 and the Standard & Poor's 500 index dipped 7.91 points (0.59 percent) to 1,343.02.

The market failed to take solace from a quarterly earnings report from Wall Street giant Morgan Stanley, the latest of the big investment banks to report results.

The bank's profit fell 60 percent from a year ago to 1.026 billion dollars, although it topped most analysts' forecasts.

The results were similar to those Tuesday of rival Goldman Sachs, which saw a drop in profit but beat most forecasts.

Elsewhere, FedEx reported a 44 percent drop in earnings but also beat expectations.

Patrick O'Hare at Briefing.com said the negative tone of the market is keeping trade cautious, as evidenced by Tuesday's drop.

"Recognizing that Goldman Sachs's earnings report failed to jumpstart the market yesterday, participants are probably wondering how the reports this morning from Morgan Stanley and FedEx possibly can," he said.