Newspaper article The Evening Standard (London, England)

Shares on the Back Foot as US Recession Looms

Newspaper article The Evening Standard (London, England)

Shares on the Back Foot as US Recession Looms

Article excerpt


THE US economy took a step nearer recession this afternoon, and thatleft share prices on both sides of the Atlantic nursing hefty falls.

A day after the Federal Reserve slashed interest rates by a further halfpointstretching the reduction during the past 10 days to 1.5 percentage pointsnews came that US jobless claims in January increased by 69,000 to 375,000, thehighest for more than three years.

Such a move will act as a drag on the economy and may even blunt White Houseplans to stimulate the ailing American economy. Said one trader: "There are agrowing number of people out of work in the US that are not going to bespending the $300 cash windfall offered by the Government." The FTSE 100 index,which had been losing ground for most of the day, extended its deficit to 81.9at 5755.4 this afternoon as Wall Street kicked in with the Dow down 115.60 at12,327.20.

It took another sterling performance by the miners to limit the losses. BHPBilliton rose 9p to 1455p, with speculators convinced it is on the verge ofraising its terms for Rio Tinto, up 41p at 4860p. Anglo American rose 3p to2668p, and Xstrata put on 14p to 3732p.

City speculators reckon a bank without money is about as useful as a chocolatekettle. Judging by today's falls in the leading High Street banks, they couldbe be right. This has led to speculation in recent months that several bankswill be forced to turn to shareholders before long for extra cash.

Their silence on the subject only incriminates them further in the eyes ofstock-market investors, who remain convinced that some heavyweight rightsissues are long overdue.

But dealers argue the banks will put off any decision until they know what thefinal bill is for the subprime mortgage meltdown. Favourites to tapshareholders include Barclays, down 281.4p at 4501.4p, Royal Bank of Scotland,171.4p cheaper at 368p, and Lloyds TSB, off 18p at 420p. There has even beengossip Barclays will cut its dividend. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.