Stocks fall on worries that banks' woes are far from over
The Dow Jones Industrial Average fell 287 points, or 3.5 percent, to close at 7,844. Banks led the Dow lower.
Among other stocks making moves today:
Sun Microsystems (JAVA) is being acquired, just not by IBM. Larry Ellison and Oracle Corp. (ORCL) have stepped up to the plate to pay $9.50 per share for the troubled technology and server company. This will transform operations at the company in a cash buyout valued at $5.6 billion in cash net of cash on hand. Sun shares were up 37 percent at $9.19 and Oracle shares were down two percent at $18.66 shortly ahead of the close.
NetApp (NTAP) was passed around all day as one of the tech stocks which could be up for grabs now that Sun is being taken over. Its stock did better than the market, but shares were up 0.7 percent at $17.72 shortly ahead of the close.
Bank of America (BAC) posted a $4.2 billion profit, or 44 cents a share and revenues were $36.1 billion; estimates were only $0.04 EPS and $27.13 billion in revenues. The real pain today was based upon very cautious comments about weakening credit in the consumer level, and they are cautious enough that it took every lender down with them. Shares were down 22 percent at $8.18 shortly before the close.
Citigroup (C) may be lumped in with the other banking giant today, but there was an analyst call which hit Vikram Pandit head on over liquidity. Goldman Sachs has a $1.50 target on the company and sees many risks ahead.
PepsiCo (PEP) posted a one percent drop in net income and said it would repurchase its bottling subsidiaries for some $6 billion. Its earnings were $0.72 EPS, technically above the $0.67 estimate. Shares were down four percent at $50.00 shortly before the close.