Yahoo, Countrywide Fall; Sprint, Oil Rise

123jump.com Staff
05 May, 2008
New York City

U.S. stocks opened and closed lower. Yahoo and Microsoft were $4 per share apart and called off merger talks. Sprint is likley to initiate merger talks with Deutsche Telekom. Sprint surged 10%. Separately, Arcelor Mittal is in preliminary talks with the second largest steel company Angang Steel in China. Countrywide plunged 10% on the speculation that the Bank America purchase terms may be revised substantially.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – The Fed survey indicates a record tight lending for consumer and business loans. Yahoo and Microsoft could not agree on merger price. Alpha Natural Resource surges on earnings.[/R]

Global Markets Update

U.S. stocks fell after the merger talks between Yahoo and Microsoft fell. Yahoo fell nearly 20% after the two companies could not agree on a price. Sprint Nextel rose on the potential interest from Deutsche Telekom. Arcelor Mittal, the largest steel company and second largest Chinese steel company are in merger talks. Berkshire Hathaway, after reporting sharply lower earnings over the weekend, is expected to make a purchase in Europe.

According the latest survey of banks conducted by the Fed, banks have tightened lending terms and standards in the last three months. Banks cited reduced appetite for risk, falling secondary market for loans and general uncertainty in the economy. Residential prime loan market also saw a decline in demand. The lending conditions record tight according the Fed survey.

China permitted more companies to open investment management operations, however the companies remained cautious. April consumer price inflation in China is expected to be near 8%, lower than in March and February. Angang Steel jumped 4% on the reports that Arcelor Mittal and Angang are in discussions to explore merger or stake sale. Retailer Maoye International fell below its offering price of HK$3.10 on its first day of trading.

European Markets indexes

In Paris CAC 40 Index decreased 6.35 or 0.13% to close at 5,063.36 and in Frankfurt DAX index higher 8.85 or 0.13% to close at 7,052.08. In Zurich trading SMI decreased 7.54 or 0.10% to close at 7,658.26. Market of London was closed today.

North American Markets indexes

Dow Jones Industrial Average fell 88.66 or 0.68% to a close of 12,969.54, S&P 500 closed down 6.41 or 0.45% to 1,407.49, and Nasdaq Composite Index decreased 12.87 or 0.52% to close at 2,464.12. In Toronto TSX Composite closed down 5.94 or 0.04% to 14,274.34.

Of the 30 stocks in Dow Jones Industrial Average, 4 closed higher, 26 closed lower, and none was unchanged.

General Motors led decliners in the Dow Jones index with a loss of 3.6% followed by losses in AIG of 3.3%, in Home Depot of 2.5%, in Citigroup of 2.4%, and in Bank of America of 2%. Alcoa led gainers in the Dow Jones with a rise of 2.1% followed increases in Chevron of 0.3%, in Boeing of 0.27% and in American Express of 0.04%.

Of the stocks in S&P 500 index, 157 stocks increased, 338 declined, and 5 were unchanged. Of the stocks in the index, 35 stocks fell more than 3% and 13 gained more than 3%.

Yahoo! led decliners in the S&P 500 index with a loss of 15% followed by losses in Countrywide Financial of 11%, in Ambac Financial of 8.9%, in XL Capital of 8.5%, and in WaMu of 7.9%.

Sprint Nextel led gainers in the S&P 500 index with a rise of 11% followed by increases in US Steel of 6.2%, in AMD of 6%, and in Freeport McMoran of 5.3%.

South American Markets Indexes

Mexico led gainers in the Latin American markets with a rise of 1.33% followed by increases in Brazil of 1.17%. Argentina and Peru fell 0.1% and Chile declined 0.6%. Markets in Venezuela and Colombia were closed today.

Asian Markets

In Hong Kong Hang Seng index decreased 57.07 or 0.22% closed to 26,183.95. In Australia ASX 200 index higher 29.90 or 0.52% to close 5,730.30. In Malaysia KL Composite index increased 3.13 or 0.25% closed to 1,274.61.

In Indonesia JSE Index edged increased 45.23 or 1.93% to 2,387.99. Sensex index in India decreased 109.22 or 0.62% to 17,490.90. Market in Japan, South Korea and Thailand were closed today.

Commodities, Metals, and Currencies

Crude oil increased $3.67 to close at $119.99 a barrel for a front month contract, natural gas increased 40 cents to $11.18 per mBtu, and gasoline futures increased 8.46 cents to close at 305.10 cents per gallon.

Gold increased $16.10 in New York trading to close at $874.10 per ounce, silver closed up $0.36 cents to $16.83 per ounce, and copper for front month delivery increased 12.70 cents to $3.9475 per pound.

Wheat futures decreased 3.50 cents in Chicago trading and closed at $8.05 per bushel. Sugar decreased 1 cent to $11.48 per pound. Soybean future closed down 18.50 cents to $12.85 a bushel.

Dollar edged lower and traded near record low against euro to $1.5490 and edged lower against yen to 104.81.

Yields on U.S. bonds decreased to 3.85% with 10 years of maturities and increased 4.59% with 30-year of maturities.