U.S. Home Prices Fall, World Markets Slide; Oil Surges 8%

Bikram Pandey
22 Feb, 2011
New York City

The S&P dropped 2.2% and the Nasdaq index decline 2.8% as unrest in Libya threaten oil production and supply to Europe. The rising tensions are making authorities in Saudi Arabia, Iran and Syria worried. Wal-Mart declined after quarterly sales were lower than expected. Home prices fell in the U.S.

[R]5:00 PM New York – The S&P dropped 2.2% and the Nasdaq index decline 2.8% as unrest in Libya threaten oil production and supply to Europe. The rising tensions are making authorities in Saudi Arabia, Iran and Syria worried. Wal-Mart declined after quarterly sales were lower than expected. Home prices fell in major U.S. cities in January.[/R]

U.S. indexes dropped nearly 2% and world markets decline. Crude oil surged as oil companies begin to evacuate staff from Libya and European markets worry of energy supply disruptions.

123jump.com sources in Riyadh, Saudi Arabia and Muscat, Oman and Damascus, Syria indicate feverish talks among opposition groups to hold rallies and show solidarity with the people in the region. Authorities are preparing to counter any large demonstrations in Syria and in Riyadh.

Home prices across the nation declined. The S&P/Case-Shiller index declined 1% from December and only one of the 20 cities tracked in the index showed an increase. The 20-city composite declined 3.9% in the fourth quarter and fell 4.1% in 2010.

Seasonally adjusted index declined 0.4% in December and only Washington, D.C. showed price increase and the index is now off 31% form its peak in 2007. Most economists are estimating prices to decline between 5% and 10% in 2011.

Chesapeake agreed to sell its shale assets to BHP for $4.75 billion.

Hormel Foods first quarter net earnings increased 34% to $148.8 million. Macy’s fourth quarter net income rose to $667 million. Medco Health fourth quarter net income increased 10% to $378.5 million. Home Depot quarterly net income rose surged 72% to $587 million. Wal-Mart net income rose surged 27.3% to $6.06 billion.

The European indexes slide as protests continued in Libya, Morocco and Bahrain. German consumer sentiment strengthened. French housing starts growth slackened in January. Swiss trade surplus and exports rose in January. Zurich Financial formed venture with Banco Santander.

The UK indexes closed lower too and the UK public finances recorded largest surplus since July 2008. BP plc intends to sell certain UK energy assets. Informa plc 2010 net declined 6.3% on flat revenue. Kerry Group Plc annual net rose 61% on sales rise of 10%.

The benchmark index in Tokyo plunged after oil prices rose sharply and in a surprise move Moody’s lowered its outlook on Japan’s debt. Crude oil futures increased 5% and tensions in Middle East and North Africa flare up and protests in Libya escalate. Automakers, shipping lines banks and real estate developers led decliners.

Stocks in Shanghai fell sharply after crude oil futures surged and China vowed to maintain fuel prices stable. The announcement fueled speculation that more tightening measures will be announced sooner than anticipated. Alibaba.com share dropped as much as 9% after chief executive and other executives were asked to resign.

Stocks in Mumbai declined tracking losses in Asia after crude oil prices surged more than 5%. Libya gained center stage as popular unrest threatens Col Muammar Gaddafi’s hold on power. The deal between Reliance Industries and BP Plc lifted fertilizer stocks. Airlines and automakers declined.

The benchmark index in Australia declined after tensions in Middle East and North Africa reach oil producing nations. BHP Billiton agreed to acquire shale gas leasehold from Chesapeake Energy for $4.75 billion. Sonic Healthcare fell after it lowered earnings outlook.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased at 3.47% and on 30-year bond fell to 4.62%.

The U.S. dollar decreased to $1.3653 to a euro and rose against the Japanese yen to 82.75 yen.

Immediate futures prices of Texas crude oil increased $7.37 to $93.57 a barrel, for natural gas rose 0.019 cents to $3.857 per mbtu and gasoline prices increased 6.40 cents to 261.53 cents a gallon.

In metals trading, copper prices decreased 14.70 cents to $4.34 per pound, gold increased $9.90 to $1,398.50 per ounce and silver rose 84 cents to $33.12.