If the International Monetary Fund is nervous, why shouldn't investors be nervous, too? On Tuesday, North American stocks fell soon after the IMF announced that the credit crisis will broaden further, with total losses associated with it climbing to $945-billion (U.S.).
The Dow Jones industrial average closed at 12,576.44, down 35.99 points or 0.3 per cent. Financials, which are on uncomfortable ground, somewhere between recovery and another dip, were among the hardest hit. Citigroup Inc. fell 3.4 and Bank of America fell 2.8 per cent as investors took the IMF numbers to heart. Intel Corp. fell 3.1 per cent, reflecting the dismal outlook from Advanced Micro Devices Inc. which announced that it will lay off 10 per cent of its work force.
The broader S&P 500 closed at 1365.54, down 7 points or 0.5 per cent. There, Washington Mutual Inc. fell 10.2 per cent a day after the troubled financial firm surged more than 29 per cent. It announced a $7-billion rescue package from a private equity group (potentially good news), but at the same time slashed its dividend and announced a big loss (bad news).
In Canada, the S&P/TSX composite index closed at 13,727.53, down 17.48 points or 0.1 per cent. It was the benchmark index's first loss in seven trading sessions, and only its second loss in 13 sessions. Research In Motion Ltd. continued its index-leading ways, rising 2.2 per cent. Potash Corp. of Saskatchewan Inc. rose 1.6 per cent. But gold producers and banks stocks fell: Barrick Gold Corp. fell 2.2 per cent, Royal Bank of Canada fell 1.1 per cent and Bank of Nova Scotia fell 1.2 per cent.