Deutsche Bank Earnings Miss

123jump.com Staff
26 Mar, 2008
New York City

European markets closed lower after earning worries for banks and a downgrade on drug stocks. Deutsche Bank chief said that the assset write downs and loan losses may make it harder to achieve profit estimate for the year. Morgan Stanley lowered its price target for Sanofi-Aventis and GlaxoSmithKline. Bureau Veritas in Paris reported earnings rise of 3% on 12% rise in sales.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European markets declined after a cautious earnings outlook from Deutsche Bank and a decline in home and durable goods orders in the U.S.[/R]

Global Markets Update

European markets fell after the Deutsche Bank said that profit target may not be achieved this year on more write-downs and losses. U.S. durable goods orders declined in February dragging dollar to a near record low against euro. Drug makers declined after Morgan Stanley cut its estimates on GlaxoSmithKline and Sanofi-Aventis. Barclays awarded 19% higher salary to its president and 3% higher to its chief executive.

U.S. stocks declined after the release of durable goods orders declined 1.7% in February. Sale of single family homes in February declined 1.8% from January and dropped 30% from a year ago. The new home sales in the month were estimated at annual rate of 590,000. Crude inventories were unchanged at the end of last week. Citigroup led the decliners in Dow Jones index after an analyst projected a loss for the year and lifted estimates of loan losses by four times from the previous estimate.

Trade surplus of Japan in February increased 0.9% from a year ago on rising exports to emerging markets and China. Imports increased 10.1% and exports rose 8.7%. Trade with the U.S. generated 70% of total trade surplus. Exports to the U.S. fell 6% and imports increased 3.7% generating a surplus of nearly $7 billion in the month, underscoring its dependence on the U.S. demand.

Hong Kong surplus in the fourth quarter 2007 jumped to 78.3 billion and in the year rose to 114.5 billion or 7.1% of GDP. Higher tax receipts and rising property values played a key role in the surge. Hong Kong, earlier had proposed to lower personal taxes on low income families on the rising government receipts. ICBC net income surged 65% to Rmb 82.3 billion lifting bank stocks. Jiangxi Copper declined 2% after reporting 12% drop in 2007 profit.

Tata Group agreed to purchase Jaguar and Land Rover brands from Ford Motor company for $2.3 billion. The deal financed with short term debt may challenge the management at Tata. Jaguar despite receiving more than $10 billion in investment from Ford in the last fifteen years has failed to generate consistent profit and lost sales. In January of 2007, Tata purchased Corus for $11.3 billion. Tata Group generates more than third of its revenue from international sales.

Australian stocks rallied as prices of base and precious metals and oil jumped in the international markets. ASX 200 gained 1.2% to 5,381.40. Perilya and CBH agreed to merge and create ninth-largest zinc manufacturer. Three CBH shares will be exchanged for one Perilya shares and a stake in Kimberly Metals. IMF Australia plans to finance litigation against Centro, MFS and Allco. Xstrata in London trading fell 12% after Vale said that it is no longer negotiating with the company.

European Markets indexes

In London FTSE 100 Index closed lower 28.70 or 0.50% to 5,660.40, in Paris CAC 40 Index decreased 15.32 or 0.33% to close at 4,676.68 and in Frankfurt DAX index lower 35.45 or 0.54% to close at 6,489.26. In Zurich trading SMI decreased 49.87 or 0.69% to close at 7,184.55.

North American Markets indexes

Dow Jones Industrial Average declined 109.74 or 0.88% to a close of 12,422.86, S&P 500 closed down 11.86 or 0.88% to 1,341.13, and Nasdaq Composite Index increased 16.69 or 0.71% to a close at 2,324.36. In Toronto TSX Composite closed up 69.64 or 0.52% to 13,391.86.

Of the 30 stocks in Dow Jones Industrial Average, 8 closed higher, 22 closed lower, and none were unchanged.

Citigroup led the decliners in the Dow with a loss of 5.6% followed by losses in American Express of 4.5%, in General Motors of 4.3%, in JP Morgan of 4.2%, AIG of 3.8%, in Bank of America of 2.7%. Exxon Mobil led the gainers in Dow with a rise of 1.24% followed by increases in Caterpillar of 0.9%, in Alcoa of 0.8%, and in Boeing of 0.5%.

Of the stocks in S&P 500 index, 122 stocks increased, 375 declined, and 3 were unchanged. Of the stocks in the index, 88 stocks fell more than 3% and 16 gained more than 3%.

Jabil Circuits led the decliners in the S&P 500 index with a plunge of 18.337% followed by declines in Clear Channel of 17.3%, in Wamu of 9.5%, in Centex of 7.99%, in MGIC of 7.8%, and in Circuit City of 7.6%.

South American Markets Indexes

In Latin Markets Chile led the decliners in the region with a fall of 0.82% followed by decreases in Colombia of 0.79%, and in Peru of 0.24%. Argentina led the gainers in the region with a rise of 0.56% followed by rises in Brazil of 0.3% and in Venezuela of 0.1%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 38.59 or 0.30% to 12,706.63, in Hong Kong Hang Seng index increased 152.49 or 0.68% closed to 22,617.01. Australia ASX 200 index increased 63.00 or 1.18% to close 5,381.40. In Malaysia KL Composite index increased 15.47 or 1.26% closed to 1,245.42.

In South Korea Kospi Index increased 4.74 or 0.28% to close at 1,679.67, in Thailand SET index closed lower 2.74 or 0.33% to 817.57 and Indonesia JSE Index edged increased 21.02 or 0.87% to 2,440.64. Sensex index in India decreased 130.66 or 0.81% to 16,086.83.

Commodities, Metals, and Currencies

Crude oil increased $5.10 to close at $106.32 a barrel for a front month contract, natural gas increased 14 cent to $9.56 per mBtu, and gasoline futures increased 5.63 cents to close at 273.65 cents per gallon.

Gold increased $14.50 in New York trading to close at $954.20 per ounce, silver closed up $0.58 cents to $18.38 per ounce, and copper for front month delivery increased 4.650 cents to 372.50 per pound.

Wheat futures increased 34.50 cents in Chicago trading and closed at $10.33 per bushel. Sugar increased 9.00 cent to 12.23 cents per pound. Soybean future closed up 45.00 cents to $13.52 a bushel.

Dollar edged lower and traded near a record low against euro to $1.5856 and edged higher against yen to 99.07.

Bond Yields decreased for 10-year U.S. bonds and closed at 3.47% and on 30-year bonds increased to close at 4.32%.