|Page (1) of 1 - 10/18/11||email article||print page|
Stocks fall after Moody's warns of French downgrade; investors sort through mixed earnings
NEW YORK (AP) ' Stocks slid in early trading Tuesday after disappointing corporate earnings reports and concerns that France and Germany may not reach an agreement to provide additional support for Greece.
Moody's also warned late Monday that it may downgrade France's top-notch credit rating in the next three months. On Tuesday, that country's finance minister said that the French economy will likely grow a rate of less than 1.5 percent next year. France is Europe's second-largest economy.
The Dow Jones industrial average was down 76 points, or 0.7 percent, to 11,320 at 10 a.m. Eastern.
The S&P 500 shed 7, or 0.6 percent, to 1,193. The Nasdaq composite fell 21, or 0.8 percent, to 2,593.
Investors were also troubled by reports that France and Germany remain divided on a plan to provide more support for Greece. An agreement between the two countries, the two largest economies that use the euro, is seen as the bedrock for a rescue package that can pass all 17 countries that share the euro.
Concerns about the possibility of a European credit crisis have driven many of the market's big swings lately. The Greek government is widely expected to go through some kind of default or restructuring of its debt. If that process becomes disorderly, European banks could suffer big losses on their holdings of Greek government bonds, which might plunge in value. If those banks become jittery enough they could pull back on lending to each other and trigger another freeze in credit markets, delivering another blow to an already weak European economy.
Tuesday brought full day of corporate earnings reports in the U.S. International Business Machines Corp. fell 4 percent after missing Wall Street's revenue estimates last quarter. It reported after the markets closed Monday.
Bank of America Corp. rose 3.4 percent after it said accounting gains and the sale of a stake in a Chinese bank helped it beat Wall Street's earnings estimates. Goldman Sachs rose 0.1 percent, even after reporting only its second quarterly loss since going public in 1999. The loss was more than analysts expected.
Coca-Cola Co. lost 0.6 percent after narrowly beating Wall Street's earnings estimates. Johnson & Johnson slid 0.2 percent after posting a 6 percent in decline in third-quarter profit, roughly in line with analyst expectations.
Apple Inc. and Intel will report their results from the last quarter after the market closes.