Banks in New York Rise; World Stocks Struggle

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

World leaders gather in Toronto to discuss the global economic health and future course of action. Three banks were seized by the U.S. regulators totaling bank failures to 86 for the year. Stocks struggled, bonds, metals and commodities gained after the U.S. lowered first quarter economic growth.

[R]6:00 PM New York – World leaders gather in Toronto to discuss the global economic health and future course of action. Three banks were seized by the U.S. regulators totaling bank failures to 86 for the year. Stocks struggled, bonds, metals and commodities gained after the U.S. lowered first quarter economic growth.[/R]

U.S. stocks trade sideways and the U.S. committee of lawmakers approved financial reforms, two years after financial crisis that nearly brought down the financial system. U.S. revised the first quarter economic growth estimate downwards to 2.7% from the previous estimate of 3%.

Bank regulators closed down three banks in Florida, Georgia and New Mexico that increased the number of banks shuttered to 86 for the years. Industry analysts are estimating the total number failures to increase more than 140 closure in 2009 and is likely to cost the insurance fund as much as $60 billion in the next three years.

First National Bank of Savannah, Georgia, Peninsula Bank in Florida and High Desert State Bank of Albuquerque, New Mexico were the banks closed today.

Federal Deposit Insurance estimated in its quarterly report ending in March that total banks deemed “problems lenders” are expected to increase to 775 banks with $431 billion in assets from 702 banks at the end of last year.

Tibco Software Inc. led gainers in the S&P 500 index with a rise of 7.5%. KB Home''s quarterly loss exceeds forecasts. H&R Block quarterly profit $691 million. Research In Motion quarterly profit jumps 20%

European indexes fall on reports that the U.S. GDP expands 2.7% in the first quarter. The EC extends bank support schemes for Austria and Latvia. Spanish producer price inflation accelerates 3.8% in May

The UK indexes slump after BP Plc stocks plunged to a 14-year low. BP Plc provided an update on developments in response to the oil well incident in the Gulf of Mexico. Leaders of G20 nations are scheduled to meet this weekend to discuss the future course of action to sustain economic recovery.

Stocks in Japan traded lower and closed again below 10000, after consumer prices fell in May. Nippon Yusen expects to beat profit forecasts on higher shipping charges. Toyota is planning to resume production in China early next week.

Stocks in Shanghai and Hong Kong traded lower. Local government debt and rising bad debts at state controlled companies may affect profits at Chinese banks. Aluminum Corp. of China sells short term loan. SAIC is planning to raise $1.5 billion.

Stocks in Mumbai traded lower. Reliance Natural signs revised gas supply deal with Reliance Industries. GMR Infrastructure gains after winning airport bid in Maldives. Fortis Healthcare drops as GIC defers investment.

Stocks in Australia continue to decline. Prime Minister Julia Gillard offered to negotiate with miners but the industry took cautious view. BG Group gets approval for LNG project in Queensland. Extract Resources is on track to develop world’s largest uranium mine in Namibia.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 190.86 or 1.92% to 9,737.48, Hang Seng index in Hong Kong decreased 42.70 or 0.21% to 20,690.79 and CSI 300 index in China lower 21.21 or 0.77% to 2,736.29. ASX 200 index in Australia decreased 66.70 or 1.49% to 4,413.00. The FTSE Bursa KL Composite index in Malaysia closed higher 0.58 or 0.04% to 1,326.45.

The Kospi Index in South Korea decreased 10.03 or 0.58% to close at 1,729.84. SET index in Thailand closed higher 0.48 or 0.06% to 793.67 and JSE Index in Indonesia increased 32.93 or 1.13% to 2,947.02. The Sensex index in India decreased 155.71 or 0.88% to 17,574.53.

Europe Markets Review

In London FTSE 100 Index traded lower 51.86 or 1.02% to 5,048.37, in Paris CAC 40 Index traded decreased 34.20 or 0.96% to close at 3,521.16, in Frankfurt DAX Index traded lower 50.12 or 0.82% to close at 6,065.36. In Zurich trading SMI Index traded decreased 55.56 or 0.88% to close at 6,265.06.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.237 and fell against the Japanese yen to 89.23.

Crude oil increased $2.35 to $78.86 a barrel for a front month contract, natural gas edged lower 11 cent to $4.86 per mBtu and gasoline increased 7.43 cent to 216.78 cents.

Gold increased $10.30 in New York trading to close at $1,256.20 per ounce, silver closed higher $0.37 to $19.15 per ounce and copper for the front month delivery increased 8.70 cents to $3.11 per pound.

Yields on 10-year U.S. bonds closed unchanged to 3.11% and on 30-year U.S. bonds fell to 4.06%.