SEC Accuses Goldman; World Stocks Fall

123jump.com Staff
16 Apr, 2010
New York City

U.S. stocks turned lower and dragged European and South American markets after the SEC accused Goldman Sachs of fraud and said investors lost $1 billion. Goldman dropped as much 16%. Gold declined sharply. Stocks in the early trading rose after home starts and permits increased in March.

[R]6:00 PM New York – U.S. stocks turned lower and dragged European and South American markets after the SEC accused Goldman Sachs of fraud and said investors lost $1 billion. Goldman dropped as much 16%. Gold declined sharply. Stocks in the early trading rose after home starts and permits increased in March.[/R]

Stocks turned lower after the Securities Exchange Commission accused Goldman Sachs Group Inc of fraud. The news turned markets lower in New York first and then indexes in Europe.

Goldman Sachs dropped as much as 16% after the SEC accused the brokerage firm of misrepresenting about the key facts related to derivatives linked to collateralized debt obligations linked to risky mortgages. The SEC’s civil suit claims that investors lost $1 billion in the structured instruments sold by Goldman Sachs.

Goldman Sachs in a statement said “completely unfounded in law and fact” and noted that it will vigorously contest the accusation and “defend the firm and its reputation.”

Goldman Sachs dropped as much as 16% before recovering to close down 12.8%.

Stocks in early trading in New York gained after housing permits and starts surged in March. Housing permits increased 7.5%, starts gained 1.6% but completions declined 3.1% in the month. Gold declined 0.9%. Google sales surged 23%, Bank of America earnings rise on Merrill Lynch acquisition.

Google quarterly sales increased 23% and net surged 41%. Advanced Micro Devices, Inc quarter profit rose 33%. Christopher & Banks Corp comparable same-store sales decreased 4%. Genuine Parts earnings per share rose 13%. General Electric profit declined nearly a third.

Greek bond yields rose to pre-bailout level as the EU finance ministers meet to set bailout loan conditions in Madrid. Airlines are expected to los one billion dollars as volcanic ash disrupt air travel in Northern Europe. Carrefour sales climb 5.5% as market in France improves.

UK stocks declined on the weakness in commodities prices. Airlines are bracing for $1 billion in lost revenues after the closure of northern European airports for the second day. Hargreaves Lansdown plc the fund manager assets under management increased 13%.

Stocks in Japan declined after investors worried additional measures to curb home mortgages in China will curtail exports of machinery. Bond yields on Japan five-year and ten-year bonds fell after the auction of 2.4 trillion yen drew the most interest from investors in five years.

Stocks in Mumbai closed lower ahead of interest rate decision next week. Foreign investors increase their exposure to India stocks to $78.2 billion. Reliance Industries takes a stake in Deccan Cargo. Goenka Diamond & Jewels drops 20% on the first day of trading. Kamat Hotels trades at one-year high.

North American Markets

Dow Jones Industrial Average declined 125.91 or 1.1% to close at 11,018.66, S&P 500 Index edged lower 19.54 or 1.6% to 1,192.13 and Nasdaq Composite Index declined 34.43 or 1.4% to close at 2,481.26. Toronto TSX Composite Index fell 140.86 or 1.2% to 12,070.66.

Latin American Markets Indexes

Mexico Bolsa Index added 512.84 or 1.50% to 33,621.39 and Brazil Bovespa Stock Index decreased 1,103.00 or 1.6% to 69,421.35.

Europe Markets Review

In London FTSE 100 Index closed lower 83.47 or 1.43% to 5,741.54, in Paris CAC 40 Index decreased83.96 or 2.07% to close at 3,981.69, in Frankfurt DAX index lower 109.67 or 1.74% to close at 6,181.78. In Zurich trading SMI decreased 98.42 or 1.41% to close at 6,869.14.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 171.61 or 1.52% to 11,102.18, Hang Seng index in Hong Kong decreased 292.56 or 1.32% to 21,865.26 and CSI 300 index in China lower 38.24 or 1.13% to 3,356.33. ASX 200 index in Australia decreased 17.20 or 0.34% to 4,984.70. The FTSE Bursa KL Composite index in Malaysia closed lower 6.06 or 0.45% to 1,332.77.

The Kospi Index in South Korea decreased 9.42 or 0.54% to close at 1,734.49. SET index in Thailand closed lower 24.74 or 3.25% to 736.16 and JSE Index in Indonesia decreased 21.86 or 0.75% to 2,878.67. The Sensex index in India decreased 48.08 or 0.27% to 17,591.18.

Commodities, Metals, and Currencies

Crude oil decreased $2.41 to $83.10 a barrel for a front month contract, natural gas edged up 6 cents to $4.05 per mBtu and gasoline decreased 4.92 cents to 227.70 cents.

Soybean future closed up 2.00 cent to $9.95 a bushel. Wheat futures increased 9.75 cents in Chicago trading to $5.02 a bushel. Sugar closed down 0.90 cents at 16.18 cents per pound.

Gold decreased $22.90 in New York trading to close at $1,137.40 per ounce, silver closed down $0.69 to $17.74 per ounce and copper for the front month delivery decreased 7.65 cents to $3.5445 per pound.

Dollar edged higher against euro to $1.3509 and increased against the Japanese yen to 92.10.

Yield on 10-year U.S. bonds fell at 3.77% and with 30-year maturities declined to 4.67%.