Records in Dollar and Oil, Yahoo Falls

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

U.S. stocks fell in the final hours of trading on rising oil and falling dollar. Crude oil jumped above $119 in the session on Nigerian oil supply disruption. The dollar fell agaist euro on talks of firm interest rates in Europ. The euro rose above $1.60 to a dollar. Gold rebounded to $925 per ounce. Yahoo after the market hours reported its quarterly net income jumped to 37 cents from 10 cents a year ago on Alibaba.com stake sale.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S. stocks declined sharply in the final hours of trading on record high oil and record low in dollar. Weak earnings outlook was reported by United Health and Texas Instruments. Sun Trust and Fifth Third Bancorp reported cautious outlook.[/R]

Global Markets Update

U.S. stocks traded sideways after more banks report losses from risky loans and growing worries related to losses from the consumer banking. For now, banks are taking losses only in the residential mortgage loans but rising charges in the consumer and retail loans are expected to be just as bad. Fifth Third and Sun Trust reported sharp rise in net charge offs and loans loss provisions. Royal Bank of Scotland is forced to raise $24 billion in UK.

Royal Bank of Scotland today announced its plan to sell assets, raise capital and cut costs. The battered bank vastly overpaid for its recent acquisition of investment banking and Asian operations of ABN Amro. The bank now suffering from losses in mortgage loans and slow down in investment banking business has seen its Tier 1 capital ratio as low as 6%. RBS plan to raise £12 billion in the largest rights issue ever in London, but will not cut its dividend for now.

The bank has been rumored for months to raise between £4 and £8 billion but its chairman insisted that the bank does not need additional capital. Home builders in the UK slumped after Merrill Lynch lowered its estimate of unit sales for 2008 and 2009. In the trading session, energy and mining stocks rose and banks and home builders declined.

Stocks in Japan continue to trade volatile and in the shadow of the U.S. market average trading. Nikkei 225 fell 1.1% to 13,547 after earnings from Bank of America and Texas Instruments dragged tech and financial stocks. Analysts also lowered outlook on Sony on the ongoing volatility in yen. More international companies are looking to issue bonds in yen. Bank of Canada was the latest in its samurai bonds. For the year nearly 1 trillion in yen bonds were issues by foreign companies.

Hong Kong stock indexes advanced after a surge in afternoon trading on rising speculation that Beijing will take additional steps to protect oil companies from rising crude oil prices. In Shanghai trading CSI 300 Index rose 0.9% to 3,296.28 and in Hong Kong trading Hang Seng added the same to 24,939. PetroChina advanced 6.5% and Sinopec increased 5.1%.

Reliance Industries in India fell after it reported 24% rise in earnings to 3,912 crore rupees. The earnings rose on higher crude oil refining margins and higher sale across various chemical segments. Tata Consultancy reported sequential profit decline on a marginal rise in revenue. The information services provider also issued a cautious guidance. TCS fell 10% and led decliners in the Sensex index.

European Markets indexes

In London FTSE 100 Index closed lower 18.30 or 0.30% to 6,034.70, in Paris CAC 40 Index decreased 37.71 or 0.77% to close at 4,872.64 and in Frankfurt DAX index lower 58.25 or 0.86% to close at 6,728.30. In Zurich trading SMI decreased 66.09 or 0.89% to close at 7,328.85.

North American Markets indexes

Dow Jones Industrial Average lost 104.79 or 0.82% to a close of 12,720.23, S&P 500 closed down 12.25 or 0.88% to 1,375.94, and Nasdaq Composite Index decreased 31.10 or 1.29% to close at 2,376.94. In Toronto TSX Composite closed down 54.82 or 0.38% to 14,266.34.

Of the 30 stocks in Dow Jones Industrial Average, 7 closed higher, 23 closed lower, and none was unchanged.

DuPont led decliner in the Dow Jones index with a fall of 4% followed by losses in American Express of 3.9% in General Motors of 3.6%, in Merck of 2.8%, and in AIG of 2.7%.

Chevron led gainers in the index with a rise of 1.4% followed by Johnson & Johnson of 1%, and in JP Morgan of 0.9%.

Of the stocks in S&P 500 index, 75 stocks increased, 422 declined, and 3 were unchanged. Of the stocks in the index, 76 stocks fell more than 3% and 13 gained more than 3%.

CIT Group led decliners in the S&P 500 index with a loss of 16% followed by declines in BJ Services of 14.70%, in Meredith Corp of 13.8%, in Tellabs of 13.79%, in Dillards of 10.67%, in Novellus of 9.9%, and in United Health of 9.6%.

Fifth Third Bancorp led gainers in the S&P 500 index stocks with a rise of 8% followed by gains in Medco of 5.6%, in Parker Hannifin of 5.3%, in Sprint Nextel of 5.22%, in Waters of 5% and in Hudson City Bancorp of 4.46%.

South American Markets Indexes

Venezuela led decliners in the South American trading with a fall of 3.90% followed by decreases in Argentina of 2.5%, in Chile of 1.47%, in Colombia of 0.31%, and in Mexico of 0.17%. Brazil edged up 0.75% and Peru added 0.50%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 220.10 or 1.63% to 13,696.55, in Hong Kong Hang Seng index increased 523.89 or 2.17% closed to 24,721.67. In Australia ASX 200 index higher 170.60 or 3.14% to close 5,600.30. In Malaysia KL Composite index increased 12.35 or 0.97% closed to 1,280.00.

In South Korea Kospi Index increased 28.58 or 1.61% to close at 1,800.48, in Thailand SET index closed lower 3.42 or 0.40% to 841.98 and Indonesia JSE Index edged decreased 13.38 or 0.57% to 2,335.89. Sensex index in India increased 258.13 or 1.57% to 16,739.33.

Commodities, Metals, and Currencies

Crude oil increased $0.87 to close at $117.56 a barrel for a front month contract, natural gas decreased 18 cent to $10.55 per mBtu, and gasoline futures increased 3.75 cents to close at 301.00 cents per gallon.

Gold increased $7.60 in New York trading to close at $925.20 per ounce, silver closed up $0.35 cents to $17.824 per ounce, and copper for front month delivery increased 9.20 cents to $3.958 per pound.

Wheat futures increased 6.5 cents in Chicago trading and closed at $8.66 per bushel. Sugar increased 36 cent to $12.95 per pound. Soybean future closed up 18.40 cents to $13.89 a bushel.

Dollar edged lower and traded at a record low against euro to $1.5992 and edged lower against yen to 103.03.

Yields on U.S. bonds decreased to 3.69% with 10 years of maturities and decreased 4.44% with 30-year of maturities.