US Economic Data Weaken Stocks

albena
21 Apr, 2005
New York City

The dollar continued its slide on Thursday, hitting one-month lows against the euro after boosted U.S. consumer prices mixed U.S. stocks and raised the worries about the possibility of stagflation in the United States. Recent signs of slowing growth combined with the slow-moving March retail sales have fueled the pressure on the U.S. currency.

U.S. stocks also fell, with the Dow Jones Industrial Average hitting a 2005 low after dropping 115.05 points to 10012.36 on surprise rise in consumer prices. The U.S. Labor Department announced that consumer prices surged a seasonally adjusted 0.6% in March, with a greater-than-expected 0.4% increase of core prices. The Standard & Poor's 500 Retail Index fell 1.73%, reflecting investors' anxiety that higher prices were driving the customers away.

Asia's major stocks plunged Thursday morning after U.S. economic data stirred inflation anxieties and bolstered an extended sell-off on Wall Street. Japan's Nikkei Average tumbled to four-month lows. The Nikkei 225 was down 259.61 points, or 2.34% at midday, to 10,828.97. The broader Topix index was down 2.06% at 1,108.22.

The dollar was trading at 106.82 yen from 106.74 in late New York trade.

Strong results from Nokia Corporation ((NOK)) helped to balance European stock markets Thursday - shares in Nokia, the world's biggest mobile phone maker, rose by around 5 percent after it reported its results.

But although Nokia posted high 1Q and sales beating forecasts, the FTSEurofirst 300 index was up only 0.05%.

The dollar traded at around $1.3090 against the euro and bought around 107.00 yen.

Crude futures dropped in Europe on Thursday - light, sweet crude slid 73 cents to $53.30 a barrel in morning electronic trading at the New York Mercantile Exchange.

Crude futures have fallen about $5 over the past two weeks since hitting an all-time high of $58.28 April 4 occasionally dipping below $50 a barrel.

China's hefty appetite for crude didn’t slow down - the world's second largest consumer of crude imported 12.68 or 2.72 million barrels daily last month.

The New York Stock Exchange, known as the Big Board, announced it will merge with electronic market operator Archipelago Holdings Inc. in a $400 million transaction. The deal will transform the NYSE, founded in 1792, into a publicly traded company and help it break into electronic trading.

The new publicly traded company will be called NYSE Group Inc., with current members of the NYSE holding a 70% stake and holders of Chicago-based Archipelago Holdings' stock owning 30. It will be based in New York. The transaction is expected to close in six to 12 months. Archipelago shares rose 11% after The Wall Street Journal reported that an announcement of a deal was imminent.

Stocks are to open up as investors eye corporate earnings.

In Earnings News:

Marriott 1Q Profit Jumps 27%
Xerox 1Q Profit Falls
AT&T Posts Increase
Nokia Sees Double-Digit Growth
Whirlpool Profit Dips on Energy Costs