Schering, Merck Decline; Exchanges Fall

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

U.S. stocks edged higher in the morning trading. Pharmaceuticals and exchanges stocks declined. A committee of cardiologist warned that two drugs jointly marketed by Schering Plough and Merck with total sales of $5 billion were no better than their generic version Zocor. Schering and Merck plunged after the report.

[R]12:30PM New York – U.S. stocks maintained their upward bias. More farmers plant soybeans and wheat.[/R]

U.S. markets edged higher after a volatile trading in the first three hours of trading. Pharmaceuticals and stocks of exchanges edged lower.

At an industry gathering of cardiologists in Chicago a committee of doctors suggested that cholesterol lowering drugs Vyotrin and Zetia are no better than generic drug or older drugs. Zocor, developed by Merck and sold at a significant discount had better results.

Vyotrin and Zetia are jointly marketed by Schering Plough and Merck and are estimated to have sales of $5 billion.

Schering Plough ((SGP)) plunged 26% to $5.08 to $14.38 and Merck ((MRK)) declined 15% to $6.41 to $38.19.

Chicago Mercantile Exchange ((CME)) declined $12.50 to $466.82 and Nymex ((NMX)) lost $2.63 to $90.13. The stock exchanges traded lower after a plan from the Treasury Secretary offered to improve and integrate various regulatory agencies. The exchanges fell on the worries of higher regulatory and operating costs.

A preliminary survey of farmers by the U.S. Department of Agriculture showed that farmers plan to plant 74.80 million acres of soybeans, an increase of 18% from a year ago, lower corn planting by 8.1%, increase wheat crop by 7.8%, and cotton by 13% lower.

A sharp rise in soybean prices played a key role in swaying farmers to plant more of it. Soy prices rose to a record high in the first week of March to $15.86 per bushel. Corn futures in Chicago trading have surged 44% in the last one year of trading.

White spring wheat planting is expected to be rise by 8% to 14.33 million acres and durum wheat acres will rise to 2.63 million acres, up 22% from a year ago. Cotton acres are expected to decline to 9.4 million acres, 13% lower than 2007 planting. Soybean planting increase is expected to be largest in Iowa and Nebraska, up 1.25 million acres and 1.20 million acres from 2007, respectively.

Corn led all grain crops by value in 2007 with a record of $52.7 billion followed by soybean with $27 billion and wheat with $14 billion. The value of crop production in 2008 is estimated at $175.5 billion, is forecast to exceed its previous record in 2007 by $25.9 billion, a 17% increase.

The rise in commodity prices boosts gross farm income, which is forecast to rise 7.5% in 2008 and to be 38% ($103 billion) above its average over the prior 10 years (1998-2007). Production expenses are forecast to exceed their 10-year average by 34% ($71 billion), partially offsetting the rise in gross farm income. Net farm income in 2008 is forecast to be 51% ($31 billion) above its 10-year average.

World markets review
In Tokyo Nikkei 225 Index closed lower 294.93 or 2.30% to 12,525.54, in Hong Kong Hang Seng index decreased 436.75 or 1.88% closed to 22,849.20. In Australia ASX 200 index higher 4.60 or 0.09% to close 5,355.70. In Malaysia KL Composite index decreased 10.89 or 0.87% closed to 1,247.52.

In South Korea Kospi Index increased 2.16 or 0.13% to close at 1,703.99, in Thailand SET index closed lower 8.14 or 0.99% to 817.03 and Indonesia JSE Index edged decreased 30.29 or 1.22% to 2,447.30. Sensex index in India decreased 726.85 or 4.44% to 15,644.44.

In London FTSE 100 Index edged lower 9.30 or 0.16% to 5,683.60, in Paris CAC 40 Index increased 14.02 or 0.30% to 4,709.94 and in Frankfurt DAX index declined 41.65 or 0.63% to 6,518.25. In Zurich trading SMI decreased 59.19 or 0.82% to 7,180.16.