[Marxism] Wall Street slumps on GE results, recession fears

[Greg McDonald <sabocat59@xxxxxxx>]

Wall St. slumps on GE results, recession fears
Fri Apr 11, 2008 7:46pm EDT

By Kevin Plumberg

NEW YORK (Reuters) - Stocks slumped on Friday after surprisingly weak  
earnings from General Electric Co and data showing consumer sentiment  
at a 26-year low fed fears the economy is in recession.

Shares of GE, viewed as an economic bellwether because of the range  
of its businesses, sank almost 13 percent in their worst decline  
since the October 1987 market crash. The news also dragged down  
shares of a wide range of multinational companies, including IBM and  
United Technologies.

GE's unexpected 6 percent profit drop was the biggest shock yet to  
the U.S. industrial sector from the credit crisis and cast a shadow  
over the upcoming quarterly earnings season.

The Reuters/University of Michigan Surveys of Consumers said its  
preliminary index of confidence fell sharply in April to its lowest  
level since 1982, when the economy was plagued by low growth and high  
inflation.

"GE is a reminder that there is still bad news out there," said John  
Praveen, chief investment strategist at Prudential International  
Investments Advisers LLC in Newark, New Jersey. "It keeps the  
financial problem and credit problem alive."

The Dow Jones industrial average was down 256.56 points, or 2.04  
percent, finishing the day at 12,325.42. The Standard & Poor's 500  
Index was down 27.72 points, or 2.04 percent, ending at 1,332.83. The  
Nasdaq Composite Index was down 61.46 points, or 2.61 percent, at  
2,290.24.

Apple Inc tumbled 4.8 percent to $147.14 as negative sentiment on the  
outlook for consumer spending spread, and was the biggest factor in  
the Nasdaq 100's largest daily drop since February 5.

On the New York Stock Exchange, decliners beat advancers by a ratio  
of slightly more than 3 to 1, though volume was modest with 1.26  
billion shares changing hands, below last year's average daily volume  
around 1.90 billion.

On Nasdaq, decliners exceeded advancers by a factor of almost 4 to 1  
with 1.90 billion shares trading, down from 2007's daily average of  
2.17 billion shares.

Shares of GE slid 12.8 percent to $32.05.

Other recent gloomy earnings from U.S. companies have contributed to  
fears that the economy is heading for or is already in a recession.

United Parcel Service Inc, the world's largest package delivery  
company, forecast weak first-quarter earnings. Aluminum producer  
Alcoa Inc said its quarterly profit was cut in half due to higher  
energy costs and a weak dollar. Advanced Micro Devices gave a revenue  
estimate below expectations and said it would cut its work force.

Frontier Airlines Holdings Inc filed for bankruptcy, citing  
unexpected problems with its principal credit card processor.  
Frontier shares plummeted 69 percent to 48 cents.

The parade of bad earnings news was a foreboding sign ahead of next  
week's results from Intel Corp, Johnson & Johnson, Coca-Cola Co and  
JPMorgan Chase & Co, among others.

Amid concerns about the global credit crisis, finance ministers and  
central bankers from the Group of Seven nations were meeting in  
Washington. A communique was expected to be issued Friday evening.

"If you had some very strong support for the dollar, it would be  
helpful in many ways to the financial markets," said Jim Awad,  
chairman of W.P. Stewart & Co. Ltd in New York.

(Additional reporting by Caroline Valetkevitch; Editing by Jan Paschal)

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