“U.S. stocks tumbled in their worst three-day slide in 10 months on Friday on fears the White House’s plan to curb bank risk-taking would cut profits and a drop in tech shares after Google Inc’s disappointing results,” Ellis Mnyandu reports for Reuters.
“Uncertainty about the Senate’s confirmation of Ben Bernanke for another term as the Federal Reserve’s chairman also rattled investors in a week when political squabbles helped erase stocks’ gains for 2010,” Mnyandu reports. “‘Between uncertainty over Bernanke, Obama’s bank regulation proposal and the election in Massachusetts, the market is like a cork in the water and the Democrats just hit the flush,’ said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. ‘It looks like we’re headed really low.'”
Mnyandu reports, “Since the Democrats lost their 60-vote hold in the Senate with the election of a Republican in Massachusetts on Tuesday, there is a growing sense among investors that political uncertainty has all but ended the rally that began in March.”
MacDailyNews Note: Shares of Apple (AAPL) lost $10.32, or nearly 5%, to close the regular session below $200 at $197.75.
Mnyandu continues, “Google sliding 5.7% to $550.01, a day after the Web search company posted quarterly revenue that missed some forecasts… Stocks hit session lows within the last half-hour on news that Britain had raised its international terrorism threat level to its second highest alert.”
“The S&P 500 registered its worst 3-day slide since March 2009, around the start of the recent rally that sent both the S&P 500 and the Dow to 15-month highs as recently as Tuesday,” Mnyandu reports. “The Dow and the S&P 500 are now off more than 2 percent year-to-date, while the Nasdaq has shed almost 3 percent.”
“Aside from worrying about how the Obama administration’s proposals might hurt bank profits, investors also fretted about the likely impact of China’s efforts to prevent the world’s third-largest economy from overheating,” Mnyandu reports. “Since China has led the nascent global economic recovery, any curbs it puts on lending threatens to slow demand that other economies, including the United States, had relied upon to spur their own growth. Banking industry sources said this week China ordered some banks to restrict lending for the rest of the month.”
Mnyandu reports, “Other disappointing news on the technology front came from Advanced Micro Devices Inc (AMD.N), which warned that sales in the first quarter of 2010 will be down. Its shares tumbled 12.4 percent to $7.88.”
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