Wall Street took a tumble Wednesday on renewed concerns about the financial sector and FedEx's warning that weakening demand and surging...
NEW YORK — Wall Street took a tumble Wednesday on renewed concerns about the financial sector and FedEx’s warning that weakening demand and surging fuel costs would weigh on profits in the coming year.
The Dow Jones industrial average fell 131.24 to 12,029.06 after diving more than 100 points the previous day
It briefly slipped under 12,000 Wednesday before recovering. The index hadn’t traded below the 12,000 mark since March 18 and last closed below that level on March 17.
Microsoft, one of the 30 Dow stocks, fell 34 cents to close at $28.46. Boeing, also a Dow stock, gained 27 cents to $74.65.
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Broader stock indicators also pulled back. The Standard & Poor’s 500 index fell 13.12 to 1,337.81, and the Nasdaq composite index fell 28.02 to 2,429.71.
Unease about financials arose after several developments. Fifth Third Bancorp said it would cut its dividend by nearly two-thirds, raise $1 billion through a preferred-stock offering and generate $1 billion by selling businesses.
And although Morgan Stanley saw a second-quarter profit that was slightly better than expected, earnings were still down 61 percent from a year earlier on declining revenue.
Earlier, FedEx forecast that earnings for the fiscal year that began this month will fall well short of what Wall Street had expected.
The shipper’s prediction serves as the latest sign that oil prices, which have nearly doubled in the past year, are hurting businesses and consumers alike.
“I think the news out of FedEx … really is starting to make people second guess some of the optimism that had been brewing over the last few weeks,” said Craig Peckham, market strategist at Jefferies in New York.
“The financials are getting hit. There just isn’t anything to spark interest in buying,” said Ron Kiddoo, chief investment officer for Cozad Asset Management. He said investors are finding it difficult to set aside worries about when the economy might show signs of strengthening.