On Wall Street, stock prices fell on Tuesday as fear returned to the market that the global economy would not avoid recession, despite all attempts by financial and monetary authorities to stabilize the financial market.
The Dow Jones index fell by 76 points or 0.82 percent, to 9,310 points. The S&P index lost 0.53 percent, diving to 998 points, while the Nasdaq index plummeted 3.54 percent, to 1,779 points. Just a day after a record 11 percent daily rise in the Dow Jones index, investors ignored the U.S. government’s announcement that it would inject $250 billion into banks and focused on corporate earnings and the real economy. Data shows that the U.S. economy is weakening. Due to declining demand, PepsiCo announced yesterday lower earnings than planned and layoffs. This announcement was an unpleasant surprise as beverage manufacturers are generally considered to ‘swim’ well during periods of economic downturn.
PepsiCo’s stock price plummeted nearly 12 percent, while its rival Coca-Cola’s stock fell by more than 7 percent. Due to fears of declining consumption, prices in the retail sector also fell sharply, with the S&P index for that sector dropping 4 percent yesterday. The technology sector fared no better, as it is commonly believed that both companies and consumers reduce spending on technology equipment during tough times. For example, Apple’s stock price fell by more than 5.5 percent.
