Credit Suisse Up, Business index Declines

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

European stocks market averages gained on a rally in financial stocks. Credit Suisse statement that for now it has adequate capital despite a large loss at the end of the first quarter lifted stocks in the sector. Futures of metals, energy and commodities generally declined. Gold fell below $900 per ounce. European business climate index fell on the rising worries related to global economic conditions and inflation in raw material prices.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European stocks edged higher on a rally in financials led by Credit Suisse loss and adequacy of capital. Commodities related stocks fell.[/R]

Global Markets Update

European business climate index in March fell to 102.4 from 104.8 as executives worry about rising commodities prices and probabilities of global economic slowdown. Euro fell today against dollar after financial and insurance stocks lifted trading sentiment in stocks. Futures in metals, crude oil and natural gas declined as dollar strengthened.

Credit Suisse reported larger than expected loss but for now averted raising capital. Swiss bank reported a loss of SFr2.14 billion. The stock rose 4% in Swiss and New York trading and sparked a rally in financial stocks in the region and in the U.S.

BASF reported first quarter profit rise of 13% to 1.17 billion euros from 1.04 billion euros on 8.8% rise in sales to 15.92 billion. Oil and gas unit reported sales rise of 26% and price increases in chemical unit lifted revenue by 12%.

Gaz de France, natural gas distributor in France and Europe reported first quarter sales rise of 15% to 10.4 billion from 9.05 billion nearly 8% rise in gas volume sales of 224 terawatt hours an increase of 16 TWh compared to 2007. Sales of electricity reached 5.8 TWh over the 1st quarter 2008, up by 1.4 TWh compared to 2007.

Internationally, Group sales reached €3,966 million, up by 19% compared to the first quarter 2007 which represents 38% of Gaz de France’s sales against 37% in the corresponding period in 2007.

U.S. stock averages advanced after a steady rise in financials and insurance stocks. Merrill Lynch surged 10% after it said that it will not cut dividend. Credit Suisse edged 5% higher after it swung to $2.2 billion loss and said that for now it may not need to raise capital. T Rowe Price and Aflac increased on better than expected earnings.

U.S. stocks edged lower in the morning after durable goods order fell 0.3% in March. Mixed earnings from several companies also weighed on the market. Amazon.com fell after earnings rose 30% to 34 cents per share. Apple edged lower after earnings missed the analysts target and Starbucks plunged 11% on weak same store sales and weaker earnings outlook for the year. FMC declined after it reported earnings surged to $1.23. Fidelity National Title fell on weak housing market and earnings slide.

UK home prices declined by 2.5% in March from February but were 1.1% higher than a year ago. For the month, the standardized house price was at £191,556. UK prices have increased 171% over the past ten years and 51% over the last five years and the average UK home price has risen by £120,860 during the past decade from £70,696 to £191,556. Separately, home builder Persimmons reported in its interim report that tight mortgage lending has affected sales and a rise in cancellations.

Stocks in Japan edged lower after JFE Holdings reported revenue rise of 8.6% and earnings decline of 12.6%. The company also hinted that a sharp rise in raw materials costs from Australia will force it to revise prices of steel products higher and did not give earnings guidance for the rest of the year. Fanuc also estimated 4.6% decline in operating income. The BOJ reported March corporate services price index rose 0.4% after rising 0.7% in February.

China, in a move to improve sagging sentiment among investors lowered its stamp duty tax on trading to 0.1% from 0.3%. Stock averages in China surged 9% on the move but stocks may sag again on rising inflation and growing disillusion among investors. Major indexes in China have lost at least 30% before gains of today. In Hong Kong stocks edged higher as well. Property prices are expected to rise in the second quarter as investors shift their focus away from stocks.

In India Maruti Suzuki, the largest automaker reported unit sales in fiscal 2008 increased 13% on 18% rise in sales. Earnings in the year increased 11% despite tighter depreciation policies. In the fourth quarter, earnings plunged 33% on higher depreciation expenses. Maruti exported 7% of its vehicles in the fiscal year. Separately cement maker, ACC reported slight gain in profit on 8% rise in sales to 1,861 crore rupees.

European Markets indexes

In London FTSE 100 Index closed lower 32.90 or 0.54% to 6,050.70, in Paris CAC 40 Index decreased 15.10 or 0.31% to close at 4,929.55 and in Frankfurt DAX index higher 26.29 or 0.39% to close at 6,821.32. In Zurich trading SMI increased 136.02 or 1.86% to close at 7,460.52.

North American Markets indexes

Dow Jones Industrial Average added 85.73 or 0.67% to a close of 12,848.95, S&P 500 closed up 8.88 or 0.64% to 1,388.81, and Nasdaq Composite Index increased 23.71 or 0.99% to close at 2,428.92. In Toronto TSX Composite closed down 103.76 or 0.74% to 13,966.04.

Of the 30 stocks in Dow Jones Industrial Average, 24 closed higher, 6 closed lower, and none was unchanged.

Chevron led decliners in the Dow Jones Industrial Average with a loss of 1.9% followed by losses in Exxon Mobil of 1.46%, in 3M of 1.44% and in Alcoa of 1.3%.

AIG led gainers in the Dow index with a rise of 7% followed by gains in General Motors of 6%, in Citigroup of 4.7%, in JP Morgan of 3.85%, in Merck of 3.7%, and in Home Depot of 3.2%.

Of the stocks in S&P 500 index, 329 stocks increased, 170 declined, and 1 was unchanged. Of the stocks in the index, 38 stocks fell more than 3% and 43 gained more than 3%.

Whirlpool led decliners in the S&P 500 index with a loss of 11% followed by Sovereign Bancorp of 10.4%, in Starbucks of 10.4%, in Newell Rubbermaid of 10.3%, and in Range Resources of 5.9%.

LSI Corp led decliners in the S&P 500 index with a rise of 24% followed by gains in MBIA of 13%, in Ford Motor Company of 12%, and in T Rowe Price of 11.6%.

South American Markets Indexes

Argentina led decliners in the South American trading with a fall of 0.51% followed by decreases in Peru of 0.37%, in Brazil of 0.36%, in Mexico of 0.320%, and in Venezuela of 0.3%. Colombia gained 0.68% and Chile added 0.12%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 38.29 or 0.28% to 13,540.87, in Hong Kong Hang Seng index increased 391.54 or 1.55% closed to 25,680.78. In Australia ASX 200 index lower 65.60 or 1.16% to close 5,587.30. In Malaysia KL Composite index increased 4.92 or 0.38% closed to 1,293.08.

In South Korea Kospi Index decreased 1.45 or 0.08% to close at 1,799.34, in Thailand SET index closed lower 3.35 or 0.40% to 834.31 and Indonesia JSE Index edged decreased 44.32 or 1.92% to 2,269.98. Sensex index in India increased 23.04 or 0.14% to 16,721.08.

Commodities, Metals, and Currencies

Crude oil decreased $2.41 to close at $118.26 a barrel for a front month contract, natural gas increased 1 cent to $10.79 per mBtu, and gasoline futures decreased 3.50 cents to close at 301.55 cents per gallon.

Gold decreased $19.60 in New York trading to close at $889.00 per ounce, silver closed down $0.50 cents to $16.78 per ounce, and copper for front month delivery decreased 2.55 cents to $3.87 per pound.

Wheat futures decreased 7.50 cents in Chicago trading and closed at $8.24 per bushel. Sugar decreased 46 cent to $12.29 per pound. Soybean future closed down 24.50 cents to $13.61 a bushel.

Dollar edged higher but traded near record low against euro to $1.5678 and edged higher against yen to 104.35.

Yields on U.S. bonds increased to 3.82% with 10 years of maturities and decreased 4.55% with 30-year of maturities.