World Markets Ease, Microsoft Boosts Dividend by 15%

Bikram Pandey
18 Sep, 2012
New York City

World markets eased after the euro zone worries resurfaced and Spain restrained from asking for a larger bailout with conditions of more spending cuts. Mortgage lending dropped to 1 16-year low as the housing market continues to struggle. Oil eased on the second day.

[R]5:30 PM New York – World markets eased after the euro zone worries resurfaced and Spain restrained from asking for a larger bailout with conditions of more spending cuts. Mortgage lending dropped to 1 16-year low as the housing market continues to struggle. Oil eased on the second day.[/R]

U.S. indexes traded lower and oil slipped for the second day as the effectiveness of the latest Fed stimulus was questioned. Markets turned cautious after Spain and the euro zone leaders negotiate if and when the struggling nation needs another bailout.

In corporate news, Dole Food agreed to sell its worldwide packaged foods and fresh produce businesses in Asia to Itochu for $1.7 billion.

Deckers Outdoor declined on weak sales. FedEx first quarter net slid and lowered its outlooks and plans to increase shipping rates. Schiff Nutrition lifts fiscal forecast.

Microsoft increased quarterly dividend payout by 15% to 23 cents a share from 20% and the company has accumulated $63.04 billion in cash and short term investments.

The European indexes edged lower as investors refocus on the details of the possible Spanish bailout as bad bank loans rose in the country. Spain raised €4.5 billion in an auction today at lower yields but policy makers in the euro zone increasingly prepare for a large bailout for the nation.

Germans economic sentiment improved in September and the Swiss economy is forecasted to expand 1% this year. Greek current account swung to a surplus in July and Portuguese producer price inflation climbed in August.

Volvo said truck deliveries fell 4% in August. Akzo Nobel plunged 5%. The Finnish paper company Metso plans layoffs in several of its units that may lead to as many as 630 job cuts.

The UK indexes as the euro zone worries resurfaced. The UK annual inflation eased to 2.5% in August and home prices increased 2% annually in July.

Markets in Tokyo closed lower after China linked companies plunged the most. Fast Retailing, Toyota, Honda, Nissan and Sony were among the large companies that were forced to shutter factories and stores in China after anti-Japanese demonstrations spread to dozens of cities on the 81st anniversary of a Japanese invasion.

Australian markets consolidated gains. Fortescue Metals won debt refinancing for its $4.5 billion debt portion and delayed its earliest payment to November 2015 as iron ore prices slide and the outlook remains uncertain.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.80% and on 30-year bond closed up to 3.00%.

The U.S. dollar inched higher to $1.302 to a euro and decreased against the Japanese yen to 78.86 yen.

Immediate delivery futures of Texas crude oil decreased $1.20 to $95.35 a barrel and Brent crude fell $2.04 to $111.75, futures of natural gas decreased 0.09 cents to $2.76 per mbtu and gasoline price edged down 5.9 cents to 289.24 cents a gallon.

In metals trading, copper decreased 0.35 cents to $3.78 per pound, gold added $1.30 to $1,771.90 per ounce and silver increased 33 cents to $34.69.