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Oil shares drag down Wall Street | Oil shares drag down Wall Street |
(about 4 hours later) | |
Wall Street shares fell on Wednesday as weakening commodity prices hit some of the biggest US companies. | |
Exxon Mobil fell 4.0% and Chevron lost 4.6% after crude oil fell by more than $6 a barrel on worries about the outlook for the US economy. | |
But bank shares were higher, lifted by better-than-expected results from investment bank Morgan Stanley. | But bank shares were higher, lifted by better-than-expected results from investment bank Morgan Stanley. |
The Dow Jones closed down 2.4% or 294.8 points at 12,097.9 while the Nasdaq fell 2.6% to 2,210.1. | |
London's FTSE 100 index was down 1%, Frankfurt's Dax was down 0.3% and in Paris the Cac 40 was down 0.5%. | London's FTSE 100 index was down 1%, Frankfurt's Dax was down 0.3% and in Paris the Cac 40 was down 0.5%. |
Additional funds | Additional funds |
Despite Morgan reporting a 42% drop in first-quarter profits, analysts had expected much worse from the bank. | Despite Morgan reporting a 42% drop in first-quarter profits, analysts had expected much worse from the bank. |
More on the City trading probe | More on the City trading probe |
Analysts said US investor confidence was further lifted by US Treasury Secretary Henry Paulson's announcement that changes to government-backed mortgage providers Fannie Mae and Freddie Mac would release an additional $200bn (£100bn) for the financing of home loans. | Analysts said US investor confidence was further lifted by US Treasury Secretary Henry Paulson's announcement that changes to government-backed mortgage providers Fannie Mae and Freddie Mac would release an additional $200bn (£100bn) for the financing of home loans. |
US stocks were also helped by Tuesday's latest interest rate cut from the Federal Reserve. | US stocks were also helped by Tuesday's latest interest rate cut from the Federal Reserve. |
Yet despite the rises, analysts said market turbulence could continue for some time. | Yet despite the rises, analysts said market turbulence could continue for some time. |
The UK stocks news was dominated by sharp losses to banking stocks, led by HBOS. | The UK stocks news was dominated by sharp losses to banking stocks, led by HBOS. |
The declines led to the UK market watchdog, the Financial Services Authority, announcing that it was looking into whether rumours had been deliberately spread to undermine bank shares. | The declines led to the UK market watchdog, the Financial Services Authority, announcing that it was looking into whether rumours had been deliberately spread to undermine bank shares. |
Officials at the Bank of England denied that any UK banks were in trouble. | Officials at the Bank of England denied that any UK banks were in trouble. |
Concerns about the financial strength of banks were strengthened last week when the fourth-largest corporate lender in the US, Bear Stearns, needed emergency funds before being bought by rival JP Morgan Chase. | Concerns about the financial strength of banks were strengthened last week when the fourth-largest corporate lender in the US, Bear Stearns, needed emergency funds before being bought by rival JP Morgan Chase. |