IBM Lifts Techs, Global Stocks Rest

123jump.com Staff
17 Apr, 2008
New York City

U.S. stocks recovered from the morning losses after Merrill reported $9 billion asset write down and expects to eliminate 4,000 positions. Airlines report weak results. Pfizer fell 4% after its net income declined but IBM earnings rose 26% on the strength in Europe and Asia. NY Attorney General opens investigation in auction rate securities. Nokia fell after it offered weak outlook. New York Times and Media General report quarterly losses.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Earnings from Pfizer, Nokia, airlines, United Technologies, and media companies dominated trading sentiment.[/R]

Global Markets Update

Merrill Lynch large loss and asset write down surprised the market and U.S. stocks edged lower as new worries related to credit market emerged. Separately, American Airlines reported quarterly loss of $1.32 as its fuel bill surged 48%. Southwest earnings declined on higher operating and fuel costs. However, IBM reported better than expected earnings. TD Ameritrade earnings increased but the stock declined.

After the close Google reported earnings rise of 30% to $4.12 per share on revenue rise of 46% to $3.7 billion. Google stock surges 9% in the after hour trading to $500.

Stocks in Japan and Asia rose after earnings from several U.S. banks and large multinational companies met expectations. In Tokyo trading Nikkei 225 rose 1.92% at 13,398.30, and the broader Topix Index gained 1.7% to 1,293.32. METI reported that industrial production in February rose 1.6% and shipment increased 1.2% and inventories added 0.19%. Asahi Glass will close several factories in the U.S. and Canada as demand for glass products decline on the slump in the U.S. housing market.

China increased its reserve ratio requirements for banks to 16% and may increase again if economy does not slow down. Economists are expecting central bank to authorize additional tightening measures after a surge in inflation and rapid rise in property prices and food and energy costs. In Hong Kong trading, Hang Seng rose 1.6% to 24,258 but in Shanghai CSI 300 index fell 3% to 3,386. China reported a total international investment of $92 billion at the end of 2007.

Stocks in Mumbai trading rebounded 1.5% to 16,481 and CNX Nifty rose same to 4,958. Software exporters rose for the second day in a row. Annual wholesale inflation for the year ending on April 5 edged lower to 7.14%. Banks gained after the inflation report. Orchid Chemicals was the most active stock for the second day in a row on the BSE.

The Bank of England weekly auction received more than three times bids for its offer of 13.7 billion pounds as interbank credit market remain seized. The Libor rate declined a fraction, but still hovered near 5.9%, significantly above the BoE target. Separately, Taylor Wimpey issued cautionary earnings guidance for the rest of the year. Of the FTSE 100 stocks, 31 rose and 70 declined on weak trading sentiment.

European Markets indexes

In London FTSE 100 Index closed lower 65.80 or 1.90% to 5,980.40, in Paris CAC 40 Index increased 7.04 or 0.15% to close at 4,862.14 and in Frankfurt DAX index higher 21.03 or 0.31% to close at 6,681.81. In Zurich trading SMI decreased 77.07 or 1.06% to close at 7,173.63.

North American Markets indexes

Dow Jones Industrial Average gained 30.37 or 0.24% to a close of 12,649.64, S&P 500 closed up 3.17 or 0.23% to 1,367.88, and Nasdaq Composite Index decreased 3.68 or 0.16% to close at 2,346.43. In Toronto TSX Composite closed up 33.52 or 0.24% to 14,133.00.

Of the 30 stocks in Dow Jones Industrial Average, 17 closed higher, 12 closed lower, and one was unchanged.

Pfizer led the decliners in the Dow Jones index with a fall of 4% followed by losses in Merck of 2.53%, in Procter & Gamble of 2.5%, and United Tech Corp of 2.1%.

American Express led gainers in the index with a rise of 2.45% followed by gains in Citigroup of 2.35%, in IBM of 2.3%, in Disney of 1.8%, and in AIG of 1.6%.

Of the stocks in S&P 500 index, 236 stocks increased, 258 declined, and 6 were unchanged. Of the stocks in the index, 13 stocks fell more than 3% and 27 gained more than 3%.

International Game Technology led decliners in the S&P 500 index with a loss of 5.3% followed by Ryder Systems of 4.4%, in Danaher of 4.3%, in LSI Corp of 3.6%, in Gilead Sciences of 3.5%.

MGIC Investment Corp led the gainers in the S&P 500 index with a rise of 19% followed by gains in Leggett Platt of 14%, in Altera of 10%, in MBIA of 8.9%, in Ambac of 8.8%, in E*Trade Financial of 7.5%.

South American Markets Indexes

Brazil led the gainers in South American trading with a rise of 0.62% followed by increases in Colombia of 0.26%, in Chile of 0.23%, and in Argentina of 0.13%. Peru fell 0.51% and Mexico declined 0.23%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 252.17 or 1.92% to 13,398.30, in Hong Kong Hang Seng index increased 380.61 or 1.59% closed to 24,258.96. In Australia ASX 200 index higher 48.70 or 0.89% to close 5,519.00. In Malaysia KL Composite index increased 2.90 or 0.23% closed to 1,256.54.

In South Korea Kospi Index increased 10.11 or 0.57% to close at 1,768.67, in Thailand SET index closed higher 12.05 or 1.45% to 845.43 and Indonesia JSE Index edged increased 3.86 or 0.16% to 2,341.78. Sensex index in India increased 237.01 or 1.46% to 16,481.20.

Commodities, Metals, and Currencies

Crude oil increased $1.12 to close at $114.91 a barrel for a front month contract, natural gas increased 20 cent to $10.40 per mBtu, and gasoline futures increased 4.99 cents to close at 293.09 cents per gallon.

Gold increased $16.30 in New York trading to close at $948.00 per ounce, silver closed up $0.06 cents to $17.85 per ounce, and copper for front month delivery increased 9.50 cents to $3.955 per pound.

Wheat futures increased 28.5 cents in Chicago trading and closed at $9.39 per bushel. Sugar increased 3.00 cent to $13.34 per pound. Soybean future closed down 36.00 cents to $13.61 a bushel.

Dollar edged lower and traded at a record low against euro to $1.5952 and edged lower against yen to 101.75.

Yields on U.S. bonds increased to 3.68% with 10 years of maturities and increased 4.49% with 30-year of maturities.