Sharp Drop in World Markets; S&P Falls 1.6%

Bikram Pandey
06 Mar, 2012
New York City

Global markets fell sharply and copper and crude oil declined after weak global economic data. European indexes drop more than 2.7% and the S&P 500 index dropped the most in three months. Anxieties were high in Europe as the deadline looms for the Greek private sector bond swap.

[R]2:00 PM New York – Global markets fell sharply and copper and crude oil declined after weak global economic data. European indexes drop more than 2.7% and the S&P 500 index dropped the most in three months. Anxieties were high in Europe as the deadline looms for the Greek private sector bond swap.[/R]

The U.S. indexes declined sharply after the euro zone economy shrank more than expected in the quarter to December and worries about the Greek bond default.

The private sector Greek bond swap has attracted so far 20% participation and Greece is looking for at least 75% rate. A disorderly default on Greek bonds will do more harm if private investors fail to agree to debt swap terms.

In corporate news, AmerisourceBergen agreed to buy World Courier Group for $520 million. Dick’s Sporting fourth quarter net increased 7% to $111.1 million. Kronos Worldwide fourth quarter net increased to $85.8 million. Stage Stores fourth quarter net increased to $32.7 million. Vail Resorts second quarter net decreased 15% to $46.4 million.

European indexes dropped more than 2.7% after the euro zone economy contracted 0.3% in the fourth quarter and investors awaited the outcome of the Greek debt swap on March 8. The UK indexes dropped after retail sales, home prices and new car registrations fell in February.

The OECD area inflation eased to a 10-month low in January. The euro area economy contracted in the fourth quarter. EU private sector productivity rose in February. Norwegian consumer sentiment improved in the first quarter.

Daimler and Volkswagen reported record auto sales in February. Merck quarterly profit tripled.

Michael Page plunged 6% after pre-tax profit fell in fiscal 2011. Daimler and Volkswagen reported record auto sales in February. Merck quarterly profit tripled.

The benchmark Nikkei 225 index declined for the second day in a row. The makers of steel and machinery and shipping companies declined after China shifted its focus on consumption from domestic investment. Bridge makers soared.

Australian stocks declined after the Reserve Bank of Australia left its key lending rate unchanged at 4.25% for the second month in a row. Resources linked stocks and banks led the decliners. Current account deficit increased in the fourth quarter.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond edged down to 1.93% and 30-year bond edged lower to 3.06%.

The U.S. dollar traded up 0.8% to $1.3108 to one euro and edged up against the Japanese yen at 80.64.

Immediate delivery futures of Texas crude oil decreased $2.05 to $104.67 a barrel and Brent crude fell $1.93 to $121.87.

Futures of natural gas rose 2 cents to $2.38 per mbtu and gasoline price decreased 3.3 cents to 322.50 cents a gallon in New York trading.

In metals trading, copper decreased 10.20 cents to $3.75 per pound, gold decreased $36.40 to $1,667.50 per ounce and silver decreased $1.10 to $32.55.