Stock Markets Plummet Amid Economic Uncertainty and Job Cuts

Strategic Insights -

Stock markets around the world slumped sharply yesterday in response to a surprising announcement from Microsoft Corp. that it will cut 5,000 jobs and its quarterly earnings missed estimates. The tech giant also stopped providing sales and profit forecasts due to economic uncertainty, citing clouded visibility and a difficult environment in which to manage money. The news sent shockwaves through the financial sector, with Toronto's S&P/TSX composite index closing down 271.33 points to 8,486.56, erasing Wednesday's 253-point gain.

Key Takeaways:

  • Microsoft Corp. announced a surprise cut of 5,000 jobs and missed quarterly earnings estimates, sending shockwaves through the financial sector.
  • The company stopped providing sales and profit forecasts due to economic uncertainty, citing clouded visibility and a difficult environment in which to manage money.
  • Toronto's S&P/TSX composite index closed sharply lower, down 271.33 points to 8,486.56, erasing Wednesday's 253-point gain.
  • New York's Dow Jones industrial average fell 105.3 points to 8,122.8 after rising 279 points Wednesday.
  • Microsoft's quarterly earnings fell 11% to $4.17 billion (U.S.), below analyst expectations, and its shares retreated $2.27 to $17.11.
  • Nokia Corp., the world's top mobile phone maker, reported a 69% drop in profit to $743.62 million, with its shares falling $1.41 to $12.30.
  • Canadian financial sector was down 6% amid worries about quarterly losses reported by big overseas banks, including Royal Bank of Scotland and U.S. Bancorp.
  • Toronto-Dominion Bank and National Bank announced new issues of preferred stock to bolster capital reserves, with TD common shares falling $1.61 (Canadian) to $39.67, while National Bank edged 11 cents lower to $32.95.
  • Potash Corp. of Saskatchewan gained $4.59 to $91.19 after its full-year earnings tripled to $3.5 billion, but cut its 2009 earnings guidance to $10.75 per share.

Statistics:

  • Toronto's S&P/TSX composite index fell 271.33 points to 8,486.56.
  • New York's Dow Jones industrial average lost 105.3 points to 8,122.8.
  • Microsoft Corp. cut 5,000 jobs and missed quarterly earnings estimates.
  • Nokia Corp.'s profit fell 69% to $743.62 million.
  • Canadian financial sector was down 6%.
  • Toronto-Dominion Bank and National Bank issued preferred stock to bolster capital reserves.
  • Potash Corp. of Saskatchewan's full-year earnings tripled to $3.5 billion.

Sources:

  • The Star's wire services