U.S. Indexes Lower on European Market Weakness

Nichole Harper
29 May, 2013
New York City

On Wall Street indexes fell and European markets dropped more than 1.5%. The dollar edged higher and trading sentiment was driven by the Fed bond buying timetable uncertainty. Smithfield Foods agreed to a deal from China based company. Stewart Enterprises agreed to a merger with Service Corp.

[R]10:20 AM New York – Market indexes on Wall Street eased and European markets dropped more than 1.5%. The dollar edged higher and trading sentiment was driven by the Fed bond buying timetable uncertainty. Smithfield Foods agreed to a deal from China based company. Stewart Enterprises agreed to a merger with Service Corp.[/R]

Market indexes on Wall Street extended worldwide losses as analysts and economists debate the uncertainty related to Fed bond buying program.

On Wall Street, the Nasdaq Composite fell 0.5% and the Dow declined 0.6% and the S&P 500 index decreased 0.61%.

The International Monetary Fund lowered its estimate of China’s growth to 7.75% in the current year from its earlier forecast of 8% in April.

The OECD lowered its estimate for the euro zone economic growth despite the signs of economic rebound in the U.S.

The Paris based organization estimated global economic growth of 3.1% in the current year and 4% next year.

The economic think tank primarily focused on the rich nations estimated euro zone economies to contract 0.6%.

European Movers

European markets declined more than 1% on the rising worries that the central banks in the U.S. and Asia may unwind the stimulus despite the reassurances earlier in the week.

FTSE 100 index dropped 1.5% to 6,660.18 and CAC 40 index declined 1.4% to 3,996.10.

Market indexes in Frankfurt declined 1.6% to 8,344.70 and the indexes in Madrid declined 0.6% and in Zurich fell 1.8%.

Market indexes pulled back after rising 10% since mid-April.

Asian Movers

Market indexes in Tokyo closed higher in volatile trading after a turbulent last week when indexes dropped more than 3%.

The yen edged higher to 102.18 against one dollar after trading as low as 102.35.

The Nikkei 225 Stock Average edged up 14.48 to 14,326.46 and the broader Topix Index rose 10.60 to 1,178.87.

The Nikkei is still up 38% for the yea r so far and declined 3.5% in the last week and nearly 15% stocks of the total of 3,700 are trading 25% below its peak in the year.

Markets in Hong Kong led the regional decline with a loss of 1.6% and indexes in India fell 0.07% and in Shanghai gained 0.12%.

Stocks in Review

Smithfield Foods agreed to a $4.72 billion offer from China based meat processor Shuanghui International Holdings Ltd.

Sprint Nextel Corp ((FON)) and SoftBank said they have entered into a national security agreement with the U.S.

The statement from Sprint and SoftBank said that the Committee of Foreign Investments in the U.S. has completed its review of the deal and there are no outstanding issues.

Stewart Enterprises Inc ((STEI)) agreed to a deal worth $1.4 billion from Service Corp. International ((SCI)).