Equities plunge as FedEx cuts earnings forecast

Dow Jones: 10,733.83 (–381.01) Nasdaq: 2,455.67 (–82.52) SP 500: 1,129.56 (–37.20)US stocks slumped yesterday, giving the Dow Jones Industrial Average its biggest two-day fall since November 2008, amid investors' concern that policy makers are running out of tools to avoid another global economic recession.

All 10 industries in the Standard and Poor’s 500 Index fell at least 2.2 per cent as losses were led by commodity and industrial shares.

FedEx tumbled 9.4 per cent to $65.72. The company, which ships more packages by air than rival United Parcel Service, has seen volume growth slow as demand for express shipments stagnates amid a weakening economic recovery. FedEx also has been spending more on jet fuel, whose average cost jumped about 48 per cent in the period.

The Dow Jones industrial average lost 381.01 points, or 3.51 per cent, to 10,733.83.

The Standard Poor’s 500 Index dropped 37.20 points, or 3.19 per cent, to 1,129.56.

The Nasdaq Composite Index fell 82.52 points, or 3.25 per cent, to 2,455.67.

“People are selling first and asking questions later,” David Kelly, chief market strategist for JPMorgan Funds in New York, said. “The problem is that policy makers seem to have no clue what the solutions are. The Fed needs to express confidence on the economy itself. I don’t know how much further the market can go down.

Alcoa, the largest US aluminum producer, dropped 7.8 per cent to $10.

Caterpillar fell 8 per cent to $73.04. Bank of America slid 5.7 per cent to $6.02.

The SP 500 may drop as low as 1,076 before investor panic abates and stocks rally, says Tom DeMark, the creator of indicators for identifying turning points in securities.

The benchmark index for US equities may fall that far intraday as early as next week and then gain as much as 20 per cent, he said in an interview from Phoenix yesterday.

Goodrich rose 10 per cent to $120.54, the biggest gain in the SP 500.

United Technologies agreed to buy Goodrich for $16.5 billion. Goodrich stockholders will get $127.50 a share. United Technologies dropped the most in the Dow, erasing 10 per cent to $67.42. – (Bloomberg)