Reuters North American News Service, October 25th, 2007
NEW YORK(Reuters) - U.S. stocks dropped
Thursday on worries that financial services companies would
report more big losses from the credit crisis.
Adding to the gloom on Wall Street, several companies,
including cable TV operator Comcast Corp, reported
disappointing quarterly results that sent their shares down by
double-digit percentage losses.
American International Group Inc was the top drag
on the Dow after market rumors the insurer may be facing a
large write-down. AIG shares slid more than 8 percent, the
biggest drop in 3 years. A company spokesman declined to
comment.
Merrill Lynch on Wednesday announced write-downs of
$7.9 billion stemming from losses on mortgage-backed debt and
related securities.
"After the numbers Merrill put out yesterday, anything is
in the realm of possibility. If it can happen to them it can
happen to anybody," said Edward Bretschger, director of equity
sales and trading at Calyon Securities in New York. "People are
scared the other shoe hasn't dropped."
The Dow Jones industrial average was down 84.05
points, or 0.61 percent, at 13,591.20. The Standard & Poor's
500 Index was down 10.55 points, or 0.70 percent, at
1,505.33. The Nasdaq Composite Index was down 33.30
points, or 1.20 percent, at 2,741.46.
AIG stock was down 7.2 percent to $59.22. Merrill stock
lost 5.8 percent to $59.58.
Comcast Corp, the largest U.S. cable TV operator, posted a
54 percent drop in quarterly net profit. Comcast also lost more
basic video subscribers than analysts had expected. Comcast
shares fell 11.6 percent to $21.09.
Another drag on the Nasdaq was software maker Symantec Corp
, which gave a weak profit outlook, sending its shares
down 13.2 percent to $18.25.
Stocks had advanced earlier in the session after a report
showed sales of new homes rose in September. Home builders'
stocks enjoyed a short-lived gain, but the index and the
broader market later turned negative as investors mulled the
data further. The gain resulted from the previous month's data
being revised significantly lower. Also, September figures were
below economists' forecasts.
The Dow Jones U.S. Home Construction index was
down 1.5 percent after being up as much as 3.1 percent.
