Market Opens Weak

123jump.com Staff
28 Jun, 2006
New York City

Market averages around the world appear in a holding patter ahead of interest rate descision. In overnight trading Japan fell close to 2%. European share are trading lower at mid-day trading. Emerging markets India, Russia and Brazil traded weak. Gold fell. J Crew priced 19 million shares at $20, above the revised filing range of $15 and $17 per share.

[R]10:15AM Market opens on a weak note.[/R]
Markets around the world appear in the holding pattern as Asian markets closed lower and European markets fall on fears of U.S. rate hikes. Gold fell in the early trading in New York. With weak opening in the New York traders focused on earnings report from Nike and J Crew initial public offering. Nike ((NKE)) reported weaker than expected fourth quarter earnings. The quarter’s earnings fell 5% to $332 million or $1.27 from $1.30 a year ago. Upscale apparel retailer J Crew Group ((JCG)) priced 18.8 million at $20 per share. The stock opened 20% higher with a trading volume of 12 million shares. The upscale retailer in the recent years has struggled and turned mildly profitable last year. Goldman Sachs and Bear Stearns are lead managers for the issue.


[R]7:15 Asian markets follow U.S. downtrend ahead of Fed’s meeting.[/R]
Asian markets closed lower on Wednesday. The Nikkei 225 declined 1.9% at 14,886.11. Technology shares tracked losses in their U.S. counterparts. Kyocera lost 3%, and Advantest Corp was off 1.6%. Automotive stocks also moved lower, led by Honda Motor shares of which dropped 2.5%, a day after undergoing a share split. Nissan Motors declined 2.3% while Toyota closed 1.9% down. Japanese tire makers finished lower, after Bridgestone warned Tuesday that its group net profit would be lower this year due to higher commodity prices. Hong Kong shares also closed lower, as property and banking companies retreated on expectations of another interest-rate rise in the U.S.

The Hang Seng Index shed 0.2% to 15742.66. HSBC Holdings lost 0.4% and Hang Seng Bank was down 0.3%. In the property sector, Hang Lung Properties declined 2.2%, Sino Land dropped 1.3% and New World Development ended 0.9% lower. In Seoul, the Korea Composite Stock Price Index shed 0.7% to 1238.71, though it recovered from an intra-day low of as much as 2%. Elsewhere in the region, Taipei's Weighted Price Index shed 0.5% to 6540.93 and Sydney's S&P/ASX200 index dropped 1.1% to 4946.8.

[R]6:30 AM European stocks in early trading fall due to rate fears.[/R]
European markets traded lower in early trading on Wednesday. London’s FTSE 100 bucked the downtrend, adding 0.2% to 5,661.6, while Frankfurt’s Xetra Dax lost 0.2% to 5,445.39, and the CAC 40 in Paris shed 0.2% to 4,760.25. On the corporate front, Renault, the French carmaker, shed 1.1%. Nissan, the Japanese manufacturer which is 44% owned by Renault, on Tuesday said it may miss its domestic full-year sales target.

Meanwhile, Dieter Zetsche, chairman of DaimlerChrysler said the company’s US Chrysler division was spending too much on incentives to clear unacceptable levels of vehicle inventory. DaimlerChrysler fell 0.9%. Shares in Adidas, the sportwear manufacturer, shed 0.8% after US rival Nike reported a 5% drop in fiscal fourth-quarter net profit. The US company announced that current-quarter profits would be hit by World Cup marketing spending. European rival Puma shed 1.5%.

Light, sweet crude oil for August delivery advanced 17 cents to $72.09 a barrel. In London, Brent crude futures on the ICE Futures exchange gained 44 cents to settle at $71.42 a barrel. Gold in London traded at $584.00 per troy ounce, down from $593.60 late Tuesday. The U.S. dollar advanced against other major currencies in European trading Wednesday. The euro traded at $1.2563, down from $1.2580 late Tuesday in New York. The dollar was up against the yen, buying 116.29 Japanese yen, up from 116.28. The British pound traded at $1.8186, down from $1.8230.

[R]5:00 AM Gold falls on selling pressure ahead of Fed meeting.[/R]
The benchmark August gold contract ended $3.30 lower at $584.40 a troy ounce. July silver futures hit a two-week high of $10.62 an ounce. But the contract faced selling to close at $10.195 an ounce, down 4.5 cents on the day. July platinum futures finished up $7 at $1,188.30 an ounce. Traders noted that most of the activity was seen in spread trading as the July contract rolls into October. September palladium settled down $6.35 at $314.20 an ounce. The most-traded September copper contract shed 14.70 cents to end at $3.0860 per pound.

Petroleum products futures maintained most of their gains. August crude-oil futures advanced 12 cents to $71.92 after rising as high as $72.50 a barrel. July gasoline settled up 2.12 cents at $2.20 a gallon. July heating oil rose 2.02 cents to $1.9587. On the New York Board of Trade, July Arabica coffee futures finished up 0.75 cent at 95.35 cents a pound, while September gained 0.75 cent to 96.70 cents. Futures on raw sugar in foreign ports for July finished down 0.12 cent at 15.64 cents a pound while October shed 0.12 cent to 16.19 cents a pound.