LYG, RBS, HBC, C, BAC, AIG, SAY, ING Popular Stocks
Stocks slumped Friday as investors reacted to a debt crisis in Dubai, with more repercussions likely on tap the next few days as traders return from major holidays in both the U.S. and Middle East. U.S. stocks were falling on Friday as the Dow Jones Industrial Average lost 1.48% to 10310, the S&P 500 dropped 1.72% to 1091 and the Nasdaq Composite slid 1.73% to 2138.
Financial stocks fell worldwide on concerns over exposure to the debt problems facing Dubai and its government-owned Dubai World, which has asked creditors for a six-month stay on repayment of its $60 billion in debts. Among those hit hardest were the U.K.’s Lloyds (NYSE:LYG, $5.71, -$0.49, -7.90%), Royal Bank of Scotland (NYSE:RBS, $11.47, -$0.56, -4.66%) and HSBC Holdings Plc (NYSE:HBC, $58.46, -$3.61, -5.82%). U.S. banks Citigroup Inc. (NYSE:C, $4.06, -$0.11, -2.64%) and Bank of America Corp. (NYSE:BAC, $15.47, -$0.48, -3.01%) also fell.
Government-controlled insurer American International Group Inc. (NYSE:AIG, $33.30, -$1.38, -3.98%) said it has agreed to settle all legal disputes with its former Chairman Maurice Greenberg, former Chief Financial Officer Howard Smith and two companies Greenberg controls: C.V. Starr & Co. and Starr International Co. Under the settlement, the parties agreed to release each other from all claims, and AIG could be required to pay up to $150 million for Greenberg and Smith’s legal fees and expenses.
India’s Central Bureau of Investigation said Thursday the accounting fraud at Satyam Computer Services Ltd. (NYSE:SAY, $4.30, -$0.35, -7.53%) is now estimated at 118.8 billion rupees ($2.56 billion), about 66% larger than the initial estimate. “We have new evidence that shows the fraud is larger than what was earlier estimated,” V.V. Laxmi Narayana, deputy inspector general of CBI, said.
Dutch financial company ING Group NV (NYSE:ING, $9.84, -$2.44, -19.87%) dropped too, and it also priced a rights issue at a steep discount. The company said it will issue new shares at a 52% discount to Thursday’s closing price, or 37.3% after taking into account the dilution once the new shares start trading.
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