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Stocks continue down Friday
Credit fears spread worldwide
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NEW YORK Wall Street skidded further Friday as investors again succumbed to anxiety over tight credit conditions even after the Federal Reserve said it would do all it can to "facilitate the orderly functioning of financial markets." The Dow Jones industrials came off of their lows after the Fed added a second dose of liquidity to the markets.

The market, which has been gyrating for weeks over fears that credit is drying up, began to pare its losses after the Fed's latest injection of cash into the banking system Friday. The day's declines, however, showed the depths of fear that have investors yanking money out of stocks.

The Fed added another $16 billion in liquidity to the market at midmorning Friday, supplementing the $19 billion added earlier in the day.

Federal Reserve policy makers "are trying to do everything they can short of cutting the federal funds rate" to try to calm the markets, said Ed Yardeni, president of Yardeni Research in Great Neck, N.Y.

But, he said, "I think they probably have to cut rates, and probably before their scheduled September meeting."

He noted that it was Fed rate cuts that calmed the market after the 1998 Russian debt crisis and the implosion of the hedge fund Long-Term Capital Management.

In late morning trading, the Dow Jones industrials dropped 122.34, or 0.92 percent, to 13,148.34, adding to a 387-point plunge on Thursday and extending a series of triple-digit moves that began in late July. The Dow earlier fell more than 200 points.

Friday's pullback followed the zigzag trading and triple-digit moves in the Dow since the index closed at a record 14,000.41 on July 19. As of Thursday's close, the Dow was down about 730 points, or 5.2 percent, from its record close.

Broader stock indicators also declined Friday. The Standard & Poor's 500 index fell 9.54, or 0.66 percent, to 1,443.55, and the Nasdaq composite index fell 26.19, or 1.02 percent, to 2,530.30.

On Friday, the New York Fed, which carries out the central bank's market operation, announced a three-day repurchase agreement and then a second "repo" to inject liquidity into the market. The Fed said Friday it would accept $19 billion and then $16 billion in mortgage backed securities. The move came after the fed funds rate, the rate banks charge each other for overnight loans, ticked above 6 percent again Friday _ well above the Fed's target of 5.25 percent and a sign that credit was becoming harder to obtain.

The Fed stepped in after the same occurrence Thursday, injecting a larger-than-normal $24 billion in temporary reserves to the U.S. banking system. In a repo, the Fed arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

"I think they're trying to bolster the market's confidence without resorting in the first instance to rate cuts," said Alan Levenson, chief economist at T. Rowe Price.

Confidence has been shaken worldwide. In Asia, which had largely missed the worldwide pullback Thursday, stocks skidded after regulators including the Bank of Japan added liquidity. The European Central Bank for the second day added cash to its money markets.

These banks and others around the world haven't worked together to inject liquidity into the markets since the aftermath of the Sept. 11, 2001, attacks. But the measures, intended to keep financial markets well-oiled, also seemed to confirm investor fears of a larger problem in the credit markets that will stall corporate growth including the burst of takeover activity that powered stocks higher this year.

Overseas, Japan's Nikkei stock average fell 2.4 percent. Hong Kong's Hang Seng Index fell 2.9 percent.

In afternoon trading, Britain's FTSE 100 fell 3.04 percent, Germany's DAX index fell 1.43 percent, and France's CAC-40 fell 2.91 percent.

Bonds rose again Friday as investors again sought the relative safety of Treasurys. The yield on the benchmark 10-year Treasury note fell to 4.74 percent from 4.79 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

The concerns about credit and the effect of subprime loans, those made to borrowers with weak credit, were undiminished Friday, perhaps in part because of comments from Countrywide Financial Corp.

The nation's biggest mortgage lender fell $2.02, or 7.1 percent, to $26.64 after saying in a regulatory filing Thursday that disruptions in credit and secondary mortgage markets pose a risk to the company and could hurt its financial standing in the short-term. Earlier in the week, Countrywide said it still has access to capital despite the credit crunch.

Credit concerns unnerved investors not only for the deals that such difficulties could prevent but also for deals in the works that could be derailed.

ABN Amro Holding NV had been down sharply early and was recently off $1.17, or 2.5 percent, to $45.95 amid worries that one or both of two competing bids for the company might fall apart. ABN fell as investors appeared to re-evaluate risk that a bid from Fortis NV, part of a consortium led by Royal Bank of Scotland PLC, could lose out to a bid from Barclays PLC, or that both could fail. However, Fortis' chief executive said he was "very confident" about financing the ABN deal, according to Dow Jones Newswires.

In economic news, the Commerce Department said U.S. import prices rose for a fifth consecutive month in July, increasing 1.5 percent. Prices rose in part amid increased energy costs. The figures could stir concern among the Fed about inflationary prices. The central bank said after its August meeting this month that its primary concern remains inflation.

Light, sweet crude fell 81 cents to $70.78 per barrel on the New York Mercantile Exchange.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 810.8 million shares.

The Russell 2000 index of smaller companies fell 8.96, or 1.14 percent, to 775.91.

 

On the Net:

New York Stock Exchange: http://www.nyse.com

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GPA grows trade, market share
Intermodal volume up 20 percent
port photo
Rubber tired gantry cranes handle cargo at the Chatham Intermodal Container Transfer Facility at the Port of Savannah. The Georgia Ports Authority's Mason Mega Rail project will double rail lift capacity to 1 million containers per year by 2020 - photo by Provided

The Georgia Ports Authority achieved 14 percent growth in March container volumes, moving 355,208 20-foot equivalent unit (TEU) containers.

From July 2017 to March, TEU container trade grew by 9 percent, or 255,786 additional units for a total of 3.08 million, a new record for Savannah.

"Savannah's continued strength is a reflection of our customers' commitment, Georgia's leadership, and the many dedicated service providers, GPA employees and ILA members who come together every day to achieve great things," said GPA Executive Director Griff Lynch. "March marked our 17th consecutive month of business expansion thanks, in part, to a strong economy and growing market share."

Intermodal rail volumes jumped by 20 percent in March and 15.4 percent for the fiscal year to date, for a total of 318,454 containers handled over nine months – another record for the GPA.

"As the numbers show, our rail cargo is growing at a faster pace than our overall trade," GPA Chairman Jimmy Allgood said. "This is important because rail is playing a key role in our responsible growth strategy. We anticipate our rail infrastructure investments to take 250,000 trucks off the road each year by 2020."

The GPA recently broke ground on its Mason Mega Rail Terminal, on which the Port of Savannah will build 10,000-foot unit trains within its own footprint. From the expanded rail infrastructure at Garden City Terminal, Class I rail providers CSX and Norfolk Southern will provide direct rail service to major Southeast and Midwestern markets from Memphis to St. Louis, Chicago to Cincinnati.

An added benefit is that the Mason Mega Rail project will move all rail switching on terminal – improving vehicle traffic flow around the port.

In August, the GPA will open its Appalachian Regional Port in Murray County. Located in an industrial belt, including the production and export of carpet and flooring, automobiles and tires, the ARP will provide an alternative to all-truck transit to Northwest Georgia.

Each round-trip container moved via the Appalachian Regional Port will offset 710 truck miles on Georgia highways.

March was also a strong month for roll-on/roll-off auto and machinery units at the Port of Brunswick and Ocean Terminal in Savannah. Colonel's Island Terminal in Brunswick handled 66,144 cars, trucks and tractors, while Ocean Terminal added 4,050, for a total 70,194, a 17.2 percent increase.

"The global economy is thriving and our volumes are following suit," Lynch said. "As existing accounts grow their footprint in the expanding auto facility in Brunswick, Georgia's competitive logistical advantages are drawing additional business across all of our docks."

Lynch noted that for the fiscal year to date, Mayor's Point breakbulk terminal in Brunswick grew by 44 percent (34,515 tons) to reach 112,728 tons of forest products. At East River Terminal, bulk cargo expanded by 34 percent July-March (189,918 tons) for a total of 750,384 tons.

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