Nasdaq Drops 2%; Goldman Subpoenaed

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
07 Jun, 2010
New York City

U.S. indexes declined for the second day on the weakness in financials and tech stocks. Tech heavy Nasdaq dropped 2% and led the decline in the popular indexes after Apple Inc and Google Inc fell more than 2%. Resource stocks fell after base metals declined.

[R]5:30 PM New York – U.S. indexes declined for the second day on the weakness in financials and tech stocks. Tech heavy Nasdaq dropped 2% and led the decline in the popular indexes after Apple Inc and Google Inc fell more than 2%. Resource stocks fell after base metals declined.[/R]

U.S. stocks traded flat in the early trading but declined after a weakness in technology stocks. Broader indexes fell more than 1% and the tech heavy Nasdaq declined 2%.

Apple Inc released iPhone 4, Goldman Sachs Group Inc was subpoenaed by the financial inquiry commission and Google received requests for its method of collecting data without permission from Connecticut Attorney General and similar requests have been made by a judge in Oregon.

Apple Inc declined 2%, Google Inc fell 2.7% and Alcoa and Freeport McMoran dropped more than 3% and 6% respectively after copper and other base metals declined.

European markets edged lower as Hungary issued contradictory statements. German factory orders increase 2.8% in April and the euro-zone investor confidence improves in June. Spain-based Grifols SA agrees to buy U.S.-based Talecris for $3.4 billion in cash and stocks.

UK markets closed lower as Prime Minister Cameron urged the nation and the government to trim its deficit. Manufacturing output grows in the second quarter. BP said it made progress in capturing as much as half the leaking oil in the Gulf of Mexico well.

Market averages in Japan declined sharply after the U.S. reported no gains in the private sector employment. Yoshihiko Noda is to be Japan’s next finance minister. Elpida plans to build a chip plant in China. Toyota may accept 25% steel price increase.

Markets in China region fell sharply following weak jobs report in the U.S. Rising curbs to property buyers and continued jitters in the euro-zone also contributed to the weakness. BoCom launches jumbo rights offering. Angang Steel denies Baotou Steel acquisition talks. HK Electric plans to buy 25% of Seabank Power from Cheung Kong Infrastructure.

Mumbai stocks and market indexes dropped sharply after markets in Asia dropped more than 2%. The weak employment data in the U.S. sparked a sell-off. India required listed companies to have at least 25% shareholding controlled by common investor to stem market manipulation and broaden shareholding. Reliance Communications approved 26% stake sale.

The Australian market index dropped sharply after the U.S. reported no private sector jobs gain in the last month and China tightened the property lending further. Commodities declined sharply in Asian trading. Perseus Mining Ltd completes A$32.8 million offering.

North American Markets

Dow Jones Industrial Average decreased 115.48 or 1.1% to close at 9,816.49, S&P 500 Index decreased 14.41 or 1.3% to 1,050.47 and Nasdaq Composite Index dropped 45.27 or 2% to close at 2,173.17. Toronto TSX Composite Index dropped 64.87 or 0.5% to 11,504.74.

Latin American Markets Indexes

Mexico IPC Index dropped 253.64 or 0.8% to 30,739.01 and Brazil Bovespa Stock Index fell 492.83 or 0.8% to 61,182.92.

Europe Markets Review

In London FTSE 100 Index traded lower 59.76 or 1.17% to 5,066.24, in Paris CAC 40 Index traded decreased 45.79 or 1.33% to close at 3,409.82, in Frankfurt DAX Index traded lower 52.24 or 0.88% to close at 5,886.64. In Zurich trading SMI Index traded decreased 13.47 or 0.21% to close at 6,285.50.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 380.39 or 3.84% to 9,520.80, Hang Seng index in Hong Kong decreased 401.92 or 2.03% to 19,378.15 and CSI 300 index in China lower 48.68 or 1.77% to 2,695.72. ASX 200 index in Australia decreased 123.50 or 2.78% to 4,325.90. The FTSE Bursa KL Composite index in Malaysia closed lower 8.12 or 0.63% to 1,286.27.

The Kospi Index in South Korea decreased 26.16 or 1.57% to close at 1,637.97. SET index in Thailand closed lower 11.63 or 1.51% to 759.85 and JSE Index in Indonesia decreased 73.02 or 2.59% to 2,750.23. The Sensex index in India decreased 336.62 or 1.97% to 16,781.07.

Commodities, Metals, and Currencies

Crude oil decreased $0.61 to $70.83 a barrel for a front month contract, natural gas edged up 7 cent to $4.99 per mBtu and gasoline decreased 1.49 cents to 198.00 cents.

Soybean future closed unchanged at $9.35 a bushel. Wheat futures decreased 3.50 cents in Chicago trading to $4.32 a bushel. Sugar closed down 0.19 cents at 14.33 cents a pound.

Gold increased $2.20 in New York trading to close at $1,243.00 an ounce, silver closed down $0.01 to $18.15 per ounce and copper for the front month delivery decreased 0.35 cent to $2.75 per pound.

Dollar edged higher against the euro to $1.193 and fell against the Japanese yen to 91.57.
The euro traded below $1.20, a four-year low.

Yield on 10-year U.S. bonds decreased to 3.14% and with 30-year maturities closed lower to 4.08%.