Nasdaq Down 0.7%

123jump.com Staff
21 Aug, 2006
New York City

After rising for the five days in a row, market appears to be ready to take profit. Nasdaq and Dow fell in the early trading and Nasdaq is now nearing 0.7% decline. Dow is down 40 points and S&P 500 is down 5 points. Lowes after reporting 60 cents per share earnings fell 3% at the open. Asian markets closed lower led by 3.2% decline in Taiwan and 0.85% loss in Japan.

[R]10:00AM Dow and Nasdaq are nearing 1% loss in the morning trading.[/R]

Most Asian markets closed lower after China raised interest rates to slow fast growing economy led by an investment boom. Hong Kong, Taiwan and Japan led the decliners in Asia. Taiwan lost 3.2%, Hong Kong dropped 1.8% and Japan fell 0.9%.

Banking stocks in Hong Kong led the broad decline in the market. Bank of China lost 0.8% and depressing other property and telecom stocks. Hang Lung Properties fell 5.5% on the 35% lower earnings. China Overseas Land & Development fell 5% on the rising rates. China Mobile, largest mobile operator in China, fell 3.6% on profit taking.

In Japan trading market average Nikkei 225 fell 0.85% on the worries of slowing U.S. economy, uncertainty in the oil market and rising rates in China. Broad decline in the market was led by earnings disappointment from online-mall operator Rakuten, the stock fell 6.5%. The telecom company Nippon Telegraph and Telephone dropped 2.2%. The company reported it plans to launch this fall social networking service. Daiwa Securities Group fell 3.7%.

Trading in other Asian markets was quiet but had a negative tone. Stocks in Taiwan came under heavy selling pressure as opposition parties expect to lead nationwide campaign to oust President Chen Shui-bian.


[R]9:00AM Market averages are expected to open lower in New York trading.[/R]

Market appears to be ready to open on a downward note after gaining every day of the last week. In the pre-market activity, weakness in European trading, fall in oil price and weak earnings guidance from Lowe’s is affecting trading sentiment.

Lowe’s Cos. ((LOW)) reported second quarter profit of 60 cents vs. 52 cents a year ago and missed the estimates of 61 cents. The company reported 11% rise in profit to $935 million in the quarter compared to $839 million a year ago on revenue growth of 12% to $13.39 billion from $11.93 billion. The same-store sales in the quarter were reported at 3.3%.

The company also cut its full year earnings per share guidance to $2.00 and $2.07 from $2.07 and $2.11. The company also said that same-store sales are likely to be between 2% and 3% lower than the earlier projection of between 4% and 5%.

In the European trading mining and energy stocks are dominating the news. France, Germany and Spain are trading fractionally lower at mid-day trading. However, the indexes in London are slightly ahead.

Newspaper report of possible bid to break up a mining conglomerate Anglo American for $80 billion has lifted mining stocks in the UK trading. Rio Tinto jumped 0.6% and Xstrata added 0.5%. BHP Billiton jumped 1.6% on the news that Chilean miners have rejected company’s offer of 4% pay increase.