On Wall Street, leading indices fell on Thursday due to weak business results from Microsoft and new macroeconomic data indicating a strengthening recession.
The Dow Jones index fell by 1.28 percent, to 8,122 points. The S&P 500 index plunged by 1.52 percent, to 827 points, while the Nasdaq index lost 2.7 percent, diving to 1,465 points. The price of Microsoft shares dropped nearly 12 percent after the software giant reported an 11 percent decline in profits in the last quarter and announced the layoff of 5,000 workers over the next 18 months. Investors were also disappointed by Microsoft’s warning that, due to unstable market conditions, it would no longer provide forecasts for future business results. The banking sector remains unstable. The price of Bank of America shares fell by more than 14 percent following the news that John Thain, the former CEO of Merrill Lynch, the investment bank acquired by BoA, had resigned.
Analysts say it is not unusual for an executive to resign when two companies merge, but it is unusual that BoA did not provide a more detailed explanation. Additionally, investors were shaken by new macroeconomic data indicating a strengthening recession. It was reported yesterday that last week the number of unemployment claims reached an unexpectedly high 589,000, while the number of housing starts in December fell by 15.5 percent, to the lowest recorded level. European stock markets also saw declines on Thursday. The London FTSE index lost 0.2 percent, dropping to 4,052 points, while the DAX index of the Frankfurt Stock Exchange fell by 0.9 percent, to 4,219 points. (H)
