By Jeremy Lemer in New York
Published: June 18 2008 13:56 | Last updated: June 18 2008 21:34
US stocks fell for a second session on Wednesday as oil prices surged in late trading while poor results from FedEx underscored the challenges of rising energy prices and crumbling profitability facing the broader economy and equity markets.
FedEx said it had lost $241m in the fourth quarter after rising fuel costs and a writedown on FedEx Kinko, its copy centre unit, took their toll. The company’s outlook statement for 2009 was also downbeat.
The results will further heighten fears about the impact of elevated oil prices on the wider economy. The parcel delivery firm is often seen as a bellwether because its business depends on the levels of activity in the economy.
FedEx shares fell 2.1 per cent to $82.60 while rival UPS lost 2.3 per cent to $65.80, dragging the industrials sector down 1 per cent.
Meanwhile, Morgan Stanley said profit dropped 57 per cent in the second quarter due to weak performances at its trading and investment banking units. The stock initially fell as much as 7.8 per cent, weighing on sentiment, only to swing back into the black in late trading.
Still, the rally had little effect on the broader financial sector.