US stocks fall on General Motors losses
Stocks fell on Wall Street on pushed by billions in losses at largest US automaker General Motors, higher unemployment figures and rising oil prices.Updated: Aug 02, 2008 11:19 IST
Stocks fell on Wall Street on Friday pushed by billions in losses at largest US automaker General Motors, higher unemployment figures and rising oil prices.
GM lost $15.5 billion, or 27.33 dollars per share, in the second quarter on the back of weak demand in the US car market spurred by soaring fuel prices and a weaker economy, the company said on Friday from its headquarters in Detroit. The loss was worse than had been anticipated. In the same period last year, the company made a profit of $891 million, or $1.56 per share.
GM shares fell 7.6 percent to 10.23 dollars on Friday.
The US economy lost 51,000 jobs in July, and the unemployment rate went up to 5.7 percent, the US Department of Labour announced on Friday. It was the seventh straight month of job losses as the economy continues to sputter, and brings to 463,000 the total lost since the beginning of the year.
"The economy is slowly rolling over," Charles Knott of Knott Capital Management told Bloomberg financial news. "We're prepared for more on the downside and continue to be very cautious. If we have a sustained recession, GM and Ford are in a heck of a lot of trouble."
The blue-chip Dow Jones Industrial Average dropped 51.70 points, or 0.5 percent, to 11,326.32. The broader Standard & Poor's 500 Index fell 7.07 points, or 0.6 percent, to 1,260.31. The technology- heavy Nasdaq Composite Index lost 14.59 points, or 0.6 percent, to 2,310.96.
The dollar rose to 64.24 euro cents from 64.11 euro cents on Thursday and fell to 107.69 Japanese yen from 107.85 yen.