US stocks drop on financial fears, record oil price

Apr 9, 2008, 21:57 GMT

New York - US stock indices were down Wednesday following weak earnings reports and warnings from financial firms that more of their assets may be vulnerable to writedowns.

United Parcel Service, the world's largest package delivery service, said first-quarter profits would be hurt by the wider economic slowdown and surging petrol prices.

Crude oil reached a record 112.12 dollars per barrel in New York trading, also bringing down shares in retailers.

Shares in investment banks Lehman Brothers, Goldman Sachs and Morgan Stanley dropped after revealing that they owned more securities that could lose value as a result of the ongoing credit crisis.

Internet store Amazon.com and electronics store Circuit City led technology shares lower with forecasts of shrinking earnings for the first quarter.

The blue-chip Dow Jones Industrial Average fell 49.18 points, or 0.39 per cent, to 12,527.26. The broader Standard & Poor's 500 Index was down 11.05 points, or 0.81 per cent, to 1,354.49. The technology- heavy Nasdaq Composite Index dropped 26.64 points, or 1.13 per cent, to 2,322.12.

The US currency declined against the euro to 63.22 euro cents from 63.65 euro cents on Tuesday. The dollar also fell against the Japanese currency to 101.81 yen from 102.60 yen on Tuesday.

Gold climbed 19.50 dollars to 937.50 dollars per fine ounce.