Standard & Poors’ warning regarding the course of fiscal stability of the United States pushed Wall Street’s key indices lower despite the recovery attempt at the end. The key indices closed with losses of over 1%.
Dow Jones was losing up to 247 points in early trade after the decline of the U.S. economy outlook by Standard & Poor’s to “negative” from “stable” as the international credit rating house warned that the political controversy for the excessive deficit exacerbates the financial profile of the U.S. However, S&P maintained its long-term credit rating to “AAA” and the short-term to “A-1+” although it warned that the deterioration of the outlook gives one in three chance of lowering the assessment of the U.S. within the next two years. In a separate report, S&P notes that the evaluation of the United States is based on high-income, diversified and flexible economy. Also notes that the assessment finds strong support in the history of prudent and credible monetary policy. The assessments, added the firm, also reflect the view of the unique advantages of the dominance of the dollar among world currencies.
“Although we believe that these advantages far outweigh what we consider key economic and financial risks for the United States and the large external position of the country as a debtor, we consider that no longer offset the credit risks for the period of the next two years in the evaluation AAA”, notes in the report Mr. Nikola G. Swann, analyst at Standard & Poor’s.
On the dashboard, Dow Jones index lost 140.24 points (-1.14%) and closed the trading session at 12201.59 points. NASDAQ index recorded a fall of 29.27 points (-1.06%) and closed at 2735.38 points. S&P 500 fell by 14.54 points (-1.10%) and closed at 1305.14 points.
Of the 30 stocks that combine the Dow Jones index only Boeing managed to close with positive sign as it increased by 0.26%. In contrast, the three stocks with the worst performance were the Bank of America (-3.12%), the Caterpillar (-3.09%) and Alcoa (-2.36%).
At the same time, investor interest focused on results of main U.S companies of the market as the banking giant Citigroup, the pharmaceutical Eli Lilly and the oil group Halliburton.
From the banking industry, profits slightly better than estimations announced Citigroup for the quarter. In particular, the banking giant’s profits fell by 32% and reached the $3 billion or 10 cents per share, from $4.4 billion or 15 cents per share in the corresponding period of 2010. Revenue fell by 22% to 19.7 billion dollars from 25.4 billion dollars. Analysts who participated in a FactSet Research poll placed the earnings per share of the bank at 9 cents per share.
The pharmaceutical Eli Lilly & Co. announced profits of 95 cents per share for the first quarter from 1.13 dollars per share a year earlier, while revenue rose nearly 6%.
Profits more than doubled announced by the service company in the oil industry Halliburton Co. for the first quarter period. Specifically, the company’s earnings rose to $511 million or 56 cents per share from $206 million or 23 cents per share, while revenue rose by 40% to 5.28 billion dollars.
