Alcoa earnings drop 52 percent in quarter
Alcoa Inc., one of the world’s largest aluminum producers, on Tuesday reported a 52 percent drop in third-quarter profit and said it would conserve cash by suspending its stock buyback program and all noncritical capital projects.
Alcoa said sharply lower aluminum prices, weaker demand and a charge from curtailing production at a Texas smelter hurt results.
Alcoa earned $268 million, or 33 cents per share, for the three months ended Sept. 30, down from $555 million, or 63 cents per share, a year earlier.
Revenue fell 2.2 percent to $7.23 billion from $7.39 billion.
Analysts polled by Thomson Financial expected profit of 50 cents per share on revenue of $7.23 billion. Those estimates typically exclude one-time items.
Bank of America profits plunge; lenders sink
Bank shares tumbled Tuesday on fears that worse-than-expected third-quarter results by industry bellwether Bank of America Corp. may signal how others in the sector will fare when they report earnings in coming weeks.
Disappointing earnings from Bank of America, headed by Chief Executive Officer Kenneth Lewis, were due largely to continued deterioration in asset quality, something most banks are likely to contend with once again when they report results for July-September. Earnings were reported two weeks ahead of schedule.
Late Monday, Charlotte, N.C.-based Bank of America reported that its third-quarter profit fell 68 percent to $1.18 billion, or 15 cents per share. Bank of America set aside $6.45 billion during the quarter to cover credit losses, compared with $2.03 billion during the same quarter last year.
Bank of America shares fell $8.45, or 26.23 percent, to $23.77. Wachovia shares shed 53 cents, or 9.17 percent, to $5.25. Citigroup shares fell $2.26, or 12.98 percent, to $15.15. Wells Fargo shares slid $3.04, or 9.04 percent, to $30.60. JPMorgan shares fell $4.68, or 10.64 percent, to $39.32. All five stocks trade on the New York Stock Exchange.
Oil prices increase to snap four-day skid
Oil prices rose Tuesday, snapping a four-day plunge as investors temporarily halted their frantic selling to see whether the government’s sweeping economic bailout can stem a widening global downturn.
Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange, after earlier trading as high as $93.02.
Prices had lost nearly $13 in the past four trading sessions as a widening economic crisis spread overseas and undercut energy demand forecasts.
Consumer borrowing declines in August
Consumer borrowing fell in August for the first time in more than a decade as households, battered by rising job layoffs and the decaying economy, cut back sharply on their use of credit.
The Federal Reserve said Tuesday that consumer borrowing fell at an annual rate of 3.7 percent in August, before the financial crisis became acute in September, forcing the government to approve a $700 billion rescue of the financial industry.
August’s slide in consumer credit marked the first time that total borrowing had fallen since a 4.3 percent rate of decline in January 1998.
Treasury prices drop along with stocks
Treasury prices fell Tuesday, even as stock gauges skidded.
The 10-year note fell 0.41 points to 104.03 and yielded 3.51 percent, up from 3.45 percent.
The 30-year bond fell 1.13 points to 107.97 and yielded 4.04 percent, up from 3.98 percent.