Wall Street report: Friday close

12 April 2012

SHARE prices closed lower as weaker-than-expected US first quarter GDP figures and a drop in existing homes sales for March sparked profit-taking. However, investors said the underlying tone of the market remained positive, with the S&P 500 ending the week higher.

The Dow Jones Industrial Average closed down 133.69 points at 8,306.35. It ended down 31 points or 0.4% on the week. Three stocks closed higher while 27 ended the day lower. The S&P 500 was down 12.62 at 898.81. The index ended up 0.5% on the week. The Nasdaq composite was down 22.69 at 1,434.54.

Altria was the worst performing stock on the Dow, slumping $1.89 or 5.74% to $31.01, as US rival RJ Reynolds' full year profit warning sparked concern about the tobacco giant's own outlook for the rest of 2003.

Amazon bucked the downward trend, soaring $3.85 or 13.02% to $28.39 after it reported first quarter pro forma earnings of 10 cents a share, from the loss of a penny a share a year ago, as sales increased 28%, beating Wall Street expectations.

According to consensus estimates from First Call/Thomson Financial, the online bookseller was expected to post pro forma EPS of 4 cents on sales of 1.053bn. In the second quarter Amazon expects sales to reach a range of $1bn-$1.05bn, or 24-30% growth.

In contrast, RJ Reynolds was down $5.62 or 16.46% at $28.58 after the company slashed its forecasts for full year profits as it released first quarter earnings. The company posted a first quarter EPS of 84 cents, which was ahead of market expectations. But this was more than offset by news that RJR is slashing its full year net profit forecast to $250m from $400m-$465m due to lower-than-expected tobacco volumes for the year and an increasingly competitive market.

Shares of AMR, parent company of American Airlines, closed up 36 cents or 8.91% at $4.40 after management concluded belt-tightening agreements today with three labour unions and averted, for now, a bankruptcy filing for the world's largest carrier.

The deals capped a tumultuous week in which the company ousted its top executive and had to fend off criticism about hefty perks being offered to top managers even as it was seeking big concessions from rank-and-file employees.

The Association of Professional Flight Attendants was the last of three unions that had to accept the offer by American's parent firm AMR Corp, and endorsed the deal today. In all, American said the cuts would save it $1.8bn annually.

The car sector was under pressure throughout the session with Ford leading the fallers, down 54 cents or 5.14% at $9.96, after UBS Warburg downgraded the company to 'reduce' from 'neutral,' saying the improvement in first quarter earnings came on the back of easy year-on-year comparisons.

The recovery in Ford automotive from the first quarter of last year hinges on two essential elements, in our view: large cost savings and significantly better pricing comparisons vs. the competition, said UBS.

UBS Warburg also downgraded GM to 'neutral' from 'buy' on concerns profits will continue to be under pressure from severe competition in the market. GM closed down $1.04 or 2.84% at $35.62.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in