Nasdaq Fell 1.75%

123jump.com Staff
27 Dec, 2007
New York City

U.S. stocks declined sharply after November durable goods orders rose less than anticipated, jobless claims gained, and oil price rose near record levels. Nasddaq fell 1.75% and Dow and S&P 500 lost 1.4%. All thirty stocks in Dow fell. Of the stocks in S&P 500, 474 fell. Oil rose after the weekly inventory report showed a decline. Former Prime Minister of Pakistan Benazir Bhutto was killed by a suicide bomber.

[R]10:30PM Frankfurt, 4:30PM New York, 8:30AM Sydney[/R]

North American Markets indexes

Dow Jones Industrial Average closed down 192.08 or 1.42% to a close of 13,359.61, S&P 500 edged lower 21.39 or 1.43% to 1,476.27, and Nasdaq Composite Index traded down 47.62 or 1.75% to a close of 2,676.79. In Toronto TSX Composite lost 19.27 or 1.20% to close at 13,675.57.

Of the 30 stocks in Dow Jones Industrial Average, none closed higher, 30 closed lower, and none was unchanged.

American Express led the decliners in the index with a loss of 3.4% followed by losses in Citigroup of 2.9%, in JP Morgan of 2.9%, in AIG of 2.54%, in Intel of 2.3%, and in HP of 2.2%. None of the stocks in the index closed higher.

Of the stocks in S&P 500, 26 closed higher, 474 fell, and none were unchanged.

Thirty eight stocks fell more than 3% and one stock rose more than 3%.

Freddie Mac led the gainers in the index with a rise of 4% followed by increases in Fannie Mae of 2.09%, in First Horizon of 1.9%, in Amazon.com of 1.5%, and in E*Trade of 1.4%.

SLM Corp led the decliners in the index with a loss of 11.2% followed by losses in Boston Properties of 8.6%, in Apartment Investment of 7.6%, in Circuit City of 7%, and Fifth Third Banc of 5.3%, and in KB Home of 5.2%.

South American Markets Indexes

In Latin Markets Venezuela was the lone gainer in the region with a rise of 1.4%. Mexico led the decliners in the region with a loss of 1.2% followed by losses in Brazil of 0.8%, in Argentina of 0.54%, and in Chile and Peru of 0.5%.

European Markets Indexes

In London FTSE 100 Index closed higher 18.50 or 0.29% to 6,497.80, in Paris CAC 40 Index increased 13.20 or 0.24% to close at 5,627.48, and in Frankfurt DAX index also increased 35.93 or 0.45% to close at 8,038.60. In Zurich trading, SMI increased 49.82 or 0.59% to close at 8,518.19.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 88.85 or 0.57% to 15,564.69, in Hong Kong Hang Seng index closed lower 285.87 or 1.02% to 27,842.93, in Australia ASX 200 increased 27.30 or 0.43% to close 6,350.90.

In South Korea Kospi Index increased 1.90 or 0.10% to close at 1,908.62, in Thailand SET index closed higher 8.83 or 1.43% to 626.87, and in Indonesia JSE Index edged up 25.16 or 0.93% to 2,739.70. Sensex index in India gained 24.20 or 0.12% to 20,216.72.

Bond Yields increased on 10-year U.S. bonds to 4.19% and 30-year bonds to 4.61%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil rose $0.75 to close at $96.72 per barrel for a front month contract, natural gas increased 2 cents to $7.18 per mBtu, and gasoline futures increased 4.64 cents to close at 249.90 cents per gallon.

Gold edged higher $2.30 in New York trading to close at $831.80 per ounce, silver closed down 17 cents to $14.81 per ounce, and copper for front month delivery declined 3.80 cents to 313.20 per pound and in London copper futures market was closed.

Dollar edged lower against euro to $1.4623 and lower to 113.700 yen.


[R]2:00PM New York – Pakistan election may be put on hold after Bhutto killing.[/R]

The leading candidate in the upcoming election and former Pakistan Prime Minister Benazir Bhutto was killed by a suicide attacker in Rawalpindi. The talks of re-imposition of martial rule in Pakistan intensified after the barbaric killing.

Pakistan entered into another chaotic period with the killing of the only viable challenger in the next election scheduled on January 8th. Benazir Bhutto, former prime minister, and a leading contender in the next election, was killed by a suicide attacker. The brutal attack was carried out in Rawalpindi after Bhutto had finished addressing a campaign rally.

Benazir Bhutto, 54 years old was rushed to hospital but died from multiple injuries from gun attacks in head and neck and a bomb blast. At least 20 other people have been killed.

The tragic killing is expected to lash out a wave of anti-government sentiment for not protecting the leader of Pakistan’s Peoples Party. Supporters of PPP have rioted in several cities and Karachi and Sindh Province remains in critical condition.

There is a widespread perception in Pakistan that the President Musharraf is acting in the interest of America and not in the interest of the people of Pakistan. Musharraf has talked about democracy for seven long years but has preferred to use army rule.

For Musharraf’s loyalty to America, George W. Bush has named Pakistan and Musharraf as American ally in its fight against terrorists. But that relationship appears one-sided to many people in Pakistan. For example, Pakistani people have nearly impossible chance of travel visa to the U.S.

Musharraf, only recently and reluctantly relinquished his military leadership role, is viewed by many in the South Asia region as puppet of the U.S. interests and has generally been ineffective in quelling terrorism on the borders with Afghanistan and India.

Musharraf, promised democracy eight years ago after he seized power in a bloodless coup, has acted with dictatorial powers in Pakistan. He agreed to an election in January only after consistent and growing international pressure. Musharraf has tried to cling to power in a chaotic nation using military force, limiting freedom of speech, and imprisoning most of his opponents.

Musharraf’s rein in Pakistan has seen economic growth in the last five years but fruits of this economic growth are limited to the rich and those allied to the military.

The American aid of $10 billion approved the by the U.S. Congress as a spending for democracy was mostly allocated to the military expenses and is largely seen as the reason for the country’s narrow economic growth in the recent years. The country has languished at the bottom on most development indexes in the last eight years with rampant corruption.

The common man in Pakistan has seen little improvement in life during Musharraf rule.

The general discontent in the population has encouraged extremist elements in the North Western Frontier where whatever little Pakistani military influence was, has been on a decline.

Osama bin Ladin and his supporters are seen to be hiding in the region by the most U.S. military analysts.

Bhutto returned to Pakistan after a self-imposed exile for eight years. The return was only possible after Musharraf’s position in the country had become tenuous in the face of rising and vocal opposition from the country’s middle and lower class.

Musharraf and the U.S. administration saw Bhutto as a way to placate the rising anti-Musharraf and anti-American sentiment in the country.

Musharraf reached out to Bhutto in what is widely perceived as his effort to fix the upcoming election and American meddling in the Pakistan’s internal affairs. Musharraf hoped that he will be able to retain his influence and the control of Pakistan army and limit the general discontent in population by installing Bhutto as the next prime minister of the country.

Bhutto was viewed as a leader with moderate political and religious views and sympathetic to the Western interests in the region which angered many terrorist and religious groups. These groups prefer Pakistan to operate under religious rule and not follow democratic principles.

Bhutto in the last eight years had lived in London and Dubai and made several visits to Washington. Her visits were mostly ignored by the leaders in the U.S. Congress and the cabinet members of the current and former administration of George W. Bush. Her association with the Western leaders and her moderate views angered the extremist elements in the country.

The leaders of the U.S. Congress and administration saw no value or benefit in supporting Bhutto when Musharraf controlled the military and was ready and willing to do their work at the expense of democratic institution in Pakistan.

The extremists groups had shown their displeasure when Bhutto returned from the self-imposed exile to Pakistan last month with a bomb blast that killed more than one hundred and thirty people on her arrival. She narrowly missed the attack.

However, today’s attack, which most political and military observers in Pakistan link to the work of terrorist groups, killed Bhutto for her belief in Western values and association with Western leaders, who also rejected her when she was out of power.

It is sad to see a leader of a troubled nation that had worked to bring the democratic values in a country that has seen so little progress in terms of good governance and remains as one of the poorest nation on the planet, been rejected by the powers in Washington and killed by the extremist violence.

Benazir Bhutto paid for the second time today, this time with her life for defending the Western and democratic principles that extremists hated. Earlier she was relegated as a leader with no future potential by Western leaders.

The U.S. and its allies supported military administration of Musharraf for the last eight years which has failed in every respect in improving lives of common man and control terrorism at the borders of Afghanistan and India.

Bhutto paid with her life for supporting democratic values while Musharraf with dictatorial powers enjoys widespread support of the Western nations.

Democracy in Pakistan may have to wait for many more years and the future of the democratic institution looks bleak in the face of current violence and military rule.

Pakistani leaders have paid more attention to the wishes of the leaders in America, Saudi Arabia, and China and have generally ignored interests of their own people.

Until leaders of Pakistan focus on improving lives of common people, security in the nation, and build democratic institution without external interference, moderate voices in Pakistan will not find a platform and younger generation will find greater meaning in religious fundamentalism.

[R]12:00PM New York – U.S. stocks declined after Bhutto in Pakistan was killed and November durable goods orders declined.[/R]

U.S. stocks declined in the first hour of trading on weaker than expected durable goods order data, weekly jobless report, and death of Bhutto in Pakistan from suicide attack.

Dow Jones Industrial Average dropped 102.75 to 13,448.94, Nasdaq declined 2,704.77, S&P 500 fell 10.08 to 1,487.58.

The Commerce Department reported that November durable goods orders rose 1% to a seasonally adjusted $214.6 billion. The orders fell 0.7% excluding transportation orders.

Initial claims of jobless benefits rose at the end of the last week by 1,000 to 349,000 and total number of people claiming benefits in the period rose to 2.713 million according to the Department of Labor.

U.S. commercial crude oil inventories dropped by 3.3 million barrels compared to the previous week. At 293.6 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories increased by 0.7 million barrels last week, but are in the lower half of the average range. Finished gasoline inventories fell last week while gasoline blending components inventories increased during this same period.

Oil jumped $1.46 to $97.43 on the report.

SLM Corp ((SLM)) fell 6% or $1.552 to $20.06 after it said that it plans to issue common and preferred stocks worth $2.5 billion to cover the stock buyback contract.

Banks declined after the durable goods orders report and bearish report from Goldman Sachs on banks.

Goldman issued a research report with an estimate of $35 billion in write-downs in the fourth quarter largely related to CDO debts and weakening values of the mortgage securities.

William Tanona nearly doubled his estimate of losses at Citi, Merrill, and JP Morgan. His new estimate for losses at Citigroup in the fourth quarter is near $18.7 billion, for Merrill Lynch is $11.5 billion, and for JP Morgan of $1.7 billion.

JP Morgan Chase ((JPM)) fell 45 cents to $44.50, Citigroup ((C)) fell 71 cents to $29.75, and Wachovia Bank ((WB)) dropped 57 cents to $38.50.

Tanona also hinted that Citigroup may need another capital infusion between $5 billion and $10 billion and may have to cut its dividend by 40%.

[R]5:00AM New York, 7:00PM Tokyo-Housing starts fell to 27% in November.[/R]

In Tokyo trading Nikkei 225 shed 0.57% or 88.85 to 15,564.69, while the broader Topix Index plunged 8.53 to 1,499.94.

In the first section of the Tokyo Stock Exchange 6.9 billion shares valued at 723 billion yen were traded and in the in the second section 284 million shares worth 4.8 billion yen changed hands.

Of the Nikkei 225 stocks 56 gained, 158 declined, and 11 were unchanged. Clarion Company Limited led advancers with a rise of 5.15% followed by Tokyu Corporation firming 3.63%.

Construction companies gained as Japan’s shipments of construction equipment rose 10.4% in November. Komatsu Limited jumped 1.65% and Hitachi Zosen soared 1.29%.

Crude oil prices rose 2% to $95.97 per barrel yesterday. Inpex rose 0.81% as a result.

The Ministry of Land, Infrastructure and Transported reported today that housing starts for new condominiums and new homes fell to 84,252 in November, 27% decline from a year ago, and 35% from October.

New dwellings started for owned and rented properties slumped 7.6% to 26,604 and 23.4% at 38,859 respectively.

New buildings for collective housing fell 63.9% to 8,331, while detached houses retreated 14.9% to 10,054.

The Land Ministry further stated that building construction starts for public investors slumped 45.3% to 377 and private investors slipped 19.2% to 12,440. Land dwellings plunged 26.7% to 7,337 units, with non-dwellings falling 9.6% at 5,439.

Building construction for mining tumbled 66.2% in November to 53 and manufacturing declined 22.4% to 983. However, wholesale and retail constructions rose 75.3% at 2,141, while real estate climbed 25.3% to 211.

Separately, the Ministry of Land, Infrastructure and Transport said today total construction orders from the 50 big domestic contractors declined 3.8% from a year earlier to 915.5 billion yen.

Japan’s Construction Equipment Manufacturers Association reported today that shipments of construction equipment rose 10.4% to 219 billion yen in November buoyed by rising demand in Russia, China and Southeast Asia.

CEMA further revealed domestic shipments climbed 4.3% to 86.4 billion yen and exports rising 14.8% to 132.7 billion yen.

Japan’s Automobile Association said today the country’s twelve largest manufacturers built in November 1.07 million cars, mini-cars, trucks and buses, an increase of 3.8% from a year ago. Exports rose 8.1% to 600,422.

The yen soared 0.06% from 114.27 to 114.25 at the close of trade.

Of the Nikkei 225 index shares Clarion Company Limited led gainers with a rise of 5.15% followed by gains in Tokyu Corporation of 3.64%, in NEC Corporation of 2.98%, in Japan Airlines of 2.66%, and Sumitomo Chemical Company of 2.56%.

Sanyo Electric led the decliners in the Nikkei 225 stocks with a retreat of 6.59% followed by losses in Marubeni Corporation of 3.12%, in Chugai Pharmaceuticals of 3%, and Dowa Holdings of 2.99%.

Sanyo Electric Company fell after the Tokyo Stock Exchange placed a special monitoring status on the company’s shares with a possible delisting. The company reported Tuesday that it will review its earnings as back as 2000 and will report 6 billion yen in losses from April 2000 through to September 2007.

In addition, the Mainichi news, an online edition, reported that Japan’s Securities and Exchange Surveillance Commission has accused Sanyo of fraudulent earnings and urged the Financial Services Agency to impose 8.3 billion yen fine.

Financial stocks also fell on Nikkei news reports Japan’s five largest lenders paid customers 260 billion yen in the year to November for excessive interest rates, adding the figure might rise to 300 billion yen by the end of the year.

Also S&P/Case Shiller home price index reported yesterday that home prices fell 6.1% in October in twenty U.S. metropolitan areas. The narrow index includes cities like Las Vegas, Miami, and San Diego that have recently seen excessive speculation in housing market. Broader indexes that measure home prices across the nation have declined but not that sharply. Mitsubishi UFJ Financial Group plunged 1.28%, Mizuho Financial Group tumbled 1.43% and Sumitomo Mitsui Financial Group dropped 0.69%.

Kyodo news reported on Tuesday that subscribers of Softbank’s discount White Plan for mobile telephone services has crossed 10 million, which accounts for 60% of the company’s subscriber base.

Bloomberg news reported today that Samsung Electronics is suing Sharp Corporation for the alleged infringement of four U.S. patents for technology used in television and computer monitors.

[R]3:50AM New York, 7:50PM Sydney – Mining stocks closed higher on takeover talks and rising demand from China.[/R]


ASX 200 index gained 0.4% or 27.3 to close at 6,350.90.


The preliminary market turnover in today’s session was 368.1 million shares worth $1.193 billion with 506 stocks rising, 423 closing lower, and 254 unchanged. Flinders Diamonds was the most active stocks with 21 million shares worth $2.04 million changing hands.

BHP Billiton added 1.4% and Rio Tinto rose 2.2%.

Australia''s second-largest medical centers operator, Primary Health Care Ltd extended its two weeks extension of its $2.1 billion ($1.8 billion) takeover bid for Symbion Health Ltd.

According to the company''s website the offer will now expire on January 21, 2008 instead of January 7. Primary holds a 35% stake in Symbion and a successful bid will see it becoming the largest health-care company in the country. Primary had in November offered $4.10 for each of the 80% of Symbion.

Symbion has 92 medical centers and 130 diagnostic imaging sites. Early this month, Healthscope, another shareholder said it is considering takeover bid for Symbion.

The announcement came two weeks after it scrapped its $2.8 billion cash and stock offer because of a tax ruling that reduced its value. Healthscope rose 0.2% and Symbion fell 0.3%.

Iron miner, Fortescue Metals Group Ltd''s ten-for-one share split, has to pay off for the company which has continued to dominate as the best performing member of the S&P/ASX 200 Index this year.

The iron-ore mining company has gained 19% since the split. On December 17, Chairman Herb Elliot said the split would improve liquidity and affordability.

Chief Executive Officer Andrew Forrest said the rise of the company''s stock by more than fivefold this year had boosted the fortune of largest shareholder.

Fortescue however said today that it is not aware of any information that may account for recent gains in the share price. The remark was in response to a query from the exchange.

Fortescue, which is due to start output in May, is building a $2.7 billion iron-ore operation in Western Australia. The company plans to quadruple output from the project from the initial 45 million tons. The stock added 8.9%, giving it a value of $19.9 billion ($17.4 billion.)

Rio Tinto chairman Paul Skinner informed shareholders that he is pleased that a deadline has been set for BHP Billiton to set the timetable for the proposed merger offer. In his letters to shareholders today, Skinner highlighted the group''s growth outlook and reiterated the board''s rejection of BHP Billiton''s $149 billion ($130 billion) proposal.

The UK Takeover Panel last week set a deadline of February 6th for BHP Billton to announce its intention to make a firm and formal offer for Rio Tinto or drop the offer. If BHP does not meet the deadline, it will be prohibited from making any offer for six months after February 6, unless it has the consent of the UK Takeover Panel.

BHP Billiton has unsuccessfully conducted talks with Rio Tinto for its merger plan of three BHP shares for one Rio Tinto stock.

The dollar closed stronger today as poor news on US home prices weighed down the American currency. At the close the dollar was trading at Australian $0.8764/69, up from Monday''s close of $0.8691/96.

Of the ASX 200 index shares, Compass Resource led the gainers with a rise of 8.2% followed by increases in Fortescue metals of 8.1%, in Coeut D''Alen of 7.8%, in Nexus Energy of 7.8%, and in Mincor Resources of 6.4% .

Of the ASX 200 index stocks Valad Property led the decliners with a fall of 6.5% followed by losses in DB Trust of 5.3%, Centro Reatil Group of 4.2%, in Envestra Limited of 4.1%, and 2.8% in Emeco Holdings of 2.8%.

In the energy sector was mixed. Woodside added 4%, Santos increased 3.7% and Oil Search gained 1.1%.

The gold miners were up with Newcrest adding 2.9% and Lihir putting on 2.1%.

The banking sector was mixed, with ANZ gaining 0.5%, the National Australia Bank putting on 0.5%, Commonwealth Bank of Australia up 0.7% and Westpac shed 0.3%.

The retailers were mixed, with David Jones adding 1.1% and Harvey Norman adding 0.9%, Wesfarmers down 0.5%, Woolworths shed 0.6%.

The media sector was also mixed, with Fairfax adding 0.9%, News Corp losing 0.1% and its non-voting scrip was down eleven cents to $23.96. Fairfax rose four cents to $4.69. Consolidated Media Holdings added 0.2% and Crown shed 0.2%.