- The Washington Times - Monday, January 5, 2009

UPDATED:

Wall Street easily digested reports Monday of expected plummeting sales by the auto industry last month but the Dow turned south when telecom and financial stocks slumped because of estimates of future weakness in those industries.

The auto industry wracked up its worst sales year in 16 years.

Market indexes held their own for most of the day, with both the tech-heavy Nasdaq and the benchmark Standard & Poors 500 inching into positive territory. But they soured during late trading along with the Dow Jones Industrial Average, which dipped below the 9,000 mark that it had passed Friday.

The Dow dropped 81.80, or 0.91 percent, to 8952.89. The Nasdaq fell 4.18, or 0.26 percent, to 1628.03. The S & P 500 sank 4.35, or 0.47 percent, to 927.45. Steven Goldman, the chief market strategist for Weeden & Co. in Greenwich, Conn., told The Washington Times that the markets tend to discount economic reports and are looking at the bigger picture such as government actions that set policy goals, including President-elect Barack Obamas planned stimulus package.

We learned our lessons from the [Depression era] and were applying them, he said.

The Dow lost ground after Bernstein Research downgraded Verizon Communications Inc. and AT&T, saying it expected slower wireless growth this year. Both companies are Dow components.

Financials took a hit after Deutsche Bank cut its earnings estimates for 16 big commercial banks this year.

A Commerce Department report showing that construction spending dropped 0.6 percent in November was half of what economists had expected, apparently bringing some relief to investors because the major market indexes moved up from their lows. They had been down more than 1 percent in early trading.

Automakers, as expected, did poorly in sales for both December and all of 2008, but for Subaru, which showed a 0.3 percent rise for all of last year. Chrysler, Toyota and Honda fared worst in December.

The authoritative auto Web site Edmunds.com predicted that sales for 2008 will have totaled just over 13 million, a drop of 18 percent from 2007 and the lowest number since 1992, when the country was emerging from a recession. The stats:

• Chrysler LLC performed the worst in December sales compared with December a year ago, having dropping 53 percent, in part because of fewer fleet sales. Its total sales for the year was off 30 percent.

• No. 1 carmaker General Motors Corp. sales for December sank 31 percent and it sold 2.95 million vehicles last year, off 23 percent.

• Ford Motor Co. sales plunged 32 percent in December and sales of 1.98 million vehicles in 2008 marked a drop of 21 percent, about half a million fewer than in 2007.

• Toyota Motor Corp. sales plummeted 37 percent in December and fell 16 percent to 2.22 million vehicles for 2008. The figures meant that Ford stood as the nations No. 3 automaker for the second successive year.

• Hondas sales dropped 35 percent in December and fell 8.2 percent for all of last year.

The news came as little surprise to the stock markets or consumers, who have kept their wallets closed all across the retail sector amid fears about further job losses and because of tight credit that has made it more difficult for potential buyers to get loans.

But, in a bright spot, Subaru reported that although its sales fell by 7.7 percent in December, sales for all of 2008 rose by 0.3 percent to 187,699 vehicles from 187,208 in 2007. The Japanese company may be the only major automaker to report higher sales for last year.

Bookseller Borders Group Inc. reported that its same-store sales for Borders superstores dropped 14.4 percent for the nine weeks ended Saturday and that same-store sales for its Waldenbooks division fell 8 percent. Its shares fell to 42 cents, threatening delisting by the New York Stock Exchange.

The weakening worldwide economy also dealt a possible blow to those who care about the finer things in life: the classic maker of china and crystal, Waterford Wedgwood PLC, filed for bankruptcy protection because it was unable to find a buyer after three years of losses.

The firm also produces the well-known brands of Royal Doulton and Rosenthal porcelain.

The company, whose origins in England and Ireland date to the 19th century and whose products are staples in American department stores, employs about 7,700 people worldwide, including 600 in England, 800 in Ireland and 1,500 in Jakarta, Indonesia.

The Irish Stock Exchange suspended trading of its shares, which virtually were worthless.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide