Wall Street tumbles on financial concerns

Analysis

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Investors were concerned once again about financials, after Barron’s said shareholders of the biggest sources of US mortgage financing would be wiped out if the US government might have to recapitalize the companies. Fannie Mae and Freddie Mac tumbled 22% and 25%, respectively and sent financial and real estate shares lower.

Moreover, the Wall Street Journal reported that Lehman Brothers Holdings Inc. might have to pre-announce a large loss for the Q3. Lehman dropped 7%. Hershey, the largest US chocolate maker, fell the most since 2002, as the company increased prices to fight rising costs, which will slow growth.

However, Lowe’s Cos. moderately rose, as its Q2 earnings report beat estimates. In addition, the second-biggest home-improvement retailer also released full-year profit projection, higher than previous forecast.

The Dow Jones fell 180.51, or 1.55%, to 11,611.94. Broader indexes also traded lower. The Standard & Poor’s 500 index dipped 19.60, or 1.51%, to 1,278.60; and the Nasdaq fell 35.54, or 1.45%, to 2,416.98. (Xinhua)

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