Credit woes hammer US stocks again; ADRs not spared

MUMBAI: US stocks ended sharply lower Friday, as credit worries resurfaced and jobless data dampened sentiment. According to government reports, Non-farm payrolls grew by a lower than expected 92,000 in July, the lowest level since February. The jobless rate was expected to remain at 4.5%. The unemployment rate rose to 4.6%, the highest since January, economists were expecting payroll growth of about 133,000, according to a survey conducted.

Credit fears were reignited as CEO of Bear Stearns said the bond market turmoil may be a worse predicament than the bursting of the Internet bubble in 2000. Shares of Bear Stearns plunged over 6%, dragging down other stocks in the financial and brokerage sectors aswell. Citigroup, the biggest US bank, lost 2.7%, Wells Fargo & Co, the second-largest US home lender, also declined.

Wachovia Corp, the fourth-largest US bank, dropped 4% after announcing one of its units was temporarily pulling the plug on home loans falling between prime and subprime quality, until market conditions improve. Worries about credit also hit credit card companies on the theory that consumers struggling with mortgage payments would also fall behind on credit card debt. American Express shares fell 5.6%, while MasterCard dropped 8%.

Read more in The Economic Times

Asian Investors Rattled by Dow's Plunge

Most Asian markets tumbled Friday in the wake of one of Wall Street's biggest drops of the year, although European markets rebounded modestly from sharp losses the previous day.

Japanese stocks fell to nearly three-month lows, Philippine stocks marked their steepest decline in 10 years, and South Korea's benchmark index - which had hit a record Wednesday - sank 4.1 percent, its biggest slide in more than three years. Chinese stocks, however, ended the day flat.

Investors in Asia were rattled after U.S. and European markets plunged Thursday amid worries over the U.S. mortgage and corporate lending markets. Those woes could cause global liquidity to dry up as international investors pull out of riskier assets, including Asian emerging markets, analysts said.

Read more in Financial Express