Record Crude; Valero, Tesoro, Stocks Decline

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

AIG swung to a loss in the first quarter after it took a charge of $9 billion in its credit derivative portfolio. The insurance comapany also plans to raise $12.5 billion through stock offering to bolster its capital base. AIG stock fell nearly 9%, as it raced to 10-year low. UK home repossessions rose to a 10-year high. European markets fell more than 1% in the region. Inflation in India and China surged on rising food and energy costs.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S. stocks fell after AIG reported a large quarterly loss and crude oil jumped to a new record high above $126 a barrel.[/R]

Global Markets Update

U.S. stocks fell after AIG reported a large loss and a plan to raise $12.5 billion. AG took a pre-tax charge of $9.5 billion in the quarter on credit market related losses. Crude oil surged to another record high and traded above $125 a barrel. March trade deficit fell to $58.2 billion as imports of oil and automobiles declined. But, deficit for the first quarter remained at elevated level. AIG stock traded near its 10-year low.

UK stocks fell after home repossessions surged, but from a low level in many parts of the island nation. The FTSE 100 index fell 1.05% to 6,204 on weakness in mining, financials and home builder stocks. Crude oil in London and New York trading rose to new intra-day high above $126 a barrel. Experian Group led gainers in the FTSE 100 index with a rise of 3.5% and Carphone Warehouse led decliners with a fall of 7.3%.

Nikkei 225 index in Tokyo trading fell 2.1% after weak earnings from Bridgestone and weaker outlook from Olympus and Toyota rattled investors. Toyota lowered its net sales and income for the current fiscal year. Bridgestone reported 1% decline in profit. Takeda Pharmaceuticals and Olympus lowered its outlook for the current fiscal year. In stock trading, utilities declined on record crude oil prices. Yokogawa Electric plunged 10% and led decliners in the index.

Hong Kong stocks fell on mounting concern over the health of the global economy after Vice Premier Wang Qishan said inflation has evolved as the country’s biggest economic problem, adding that Beijing will further tighten its monetary policy. Hang Seng fell 1.5% today and dropped 4.5% for the week. CSI 300 index in Shanghai trading lost 1.2% in the session. Producers Price index in April rose at 8.1% in China from a year ago and factory cost of raw materials gained 11.8% in the period.

Wholesale price index in India fell in the latest period measured two weeks ago. Rising energy and food prices continue to fuel inflation above the target set by the Reserve Bank of India. Sensex index fell 2% to 16,737. Trading on two largest stocks exchanged was 20,000 crore rupees or $5 billion. ICICI Bank, HDFC Bank and State Bank of India fell in trading. Reliance Industries fell 5.2%.

European Markets indexes

In London FTSE 100 Index closed lower 66.10 or 1.05% to 6,204.70, in Paris CAC 40 Index decreased 95.02 or 1.88% to close at 4,960.56 and in Frankfurt DAX index lower 68.73 or 0.97% to close at 7,003.17. In Zurich trading SMI decreased 102.18 or 1.35% to close at 7,483.97.

North American Markets indexes

Dow Jones Industrial Average fell 120.90 or 0.94% to a close of 12,745.88, S&P 500 closed down 9.40 or 0.67% to 1,388.28, and Nasdaq Composite Index decreased 5.72 or 0.23% to close at 2,445.52. In Toronto TSX Composite closed down 86.80 or 0.59% to 14,521.19.

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

AIG led decliners in the Dow Jones Index with a fall of 8.8% followed by losses in General Motors of 4%, in Citigroup of 2.7%, in Bank of America of 1.8% and in DuPont of 1.8%. JP Morgan Chase led the gainers in the index with a rise of 1.13% followed by gains in Microsoft of 0.4%, in American Express of 0.23% and in Home Depot of 0.2%.

Of the stocks in S&P 500 index, 156 stocks increased, 340 declined, and 4 were unchanged. Of the stocks in the index, 17 stocks fell more than 3% and 15 gained more than 3%.

MBIA led the decliners in the S&P 500 index with a fall of 9% followed by losses in AIG of 8.8%, Mylan of 8.3%, in Ambac Financial of 7%, in Public Storage of 6%, in Countrywide Financial of 5.6% and in Tesoro of 5.5%. H&R Block led gainers in the S&P 500 index with a rise of 7.8% followed by gains in Teco Energy of 7.6%, in AES Corp of 6.6%, in Sovereign Bancorp of 5.4% and in Loews Corp of 5%.

South American Markets Indexes

Argentina led gainers in the Latin American markets with a rise of 0.60% followed by increases in Colombia of 0.45% and in Jamaica of 0.11%. Peru led decliners in the region with a loss of 0.28% followed by losses in Mexico of 0.25%, in Venezuela of 0.19%, and in Brazil and Chile of 0.1%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 287.92 or 2.06% to 13,655.34, in Hong Kong Hang Seng index decreased 386.62 or 1.52% closed to 25,063.17. In Australia ASX 200 index higher 48.60 or 0.85% to close 5,771.80. In Malaysia KL Composite index increased 4.92 or 0.38% closed to 1,285.27.

In South Korea Kospi Index decreased 24.30 or 1.31% to close at 1,823.70, in Thailand SET index closed lower 3.46 or 0.41% to 846.71 and Indonesia JSE Index edged decreased 1.91 or 0.08% to 2,375.03. Sensex index in India decreased 343.58 or 2.01% to 16,737.07.

Commodities, Metals, and Currencies

Crude oil increased $2.35 to close at $126.04 a barrel for a front month contract, natural gas increased 28 cents to $11.54 per mBtu, and gasoline futures increased 6.14 cents to close at 319.92 cents per gallon.

Gold increased $3.70 in New York trading to close at $885.80 per ounce, silver closed up 4 cents to $16.91 per ounce, and copper for front month delivery decreased 7.10 cents to $3.71 per pound.

Wheat futures decreased 17.50 cents in Chicago trading and closed at $8.04 per bushel. Sugar increased 15 cent to $11.61 per pound. Soybean future closed up 48.00 cents to $13.58 a bushel.

Dollar edged lower and traded near record low against euro to $1.5482 and edged higher against yen to 102.93.

Yields on U.S. bonds was unchanged to 3.77% with 10 years of maturities and decreased to 4.52% with 30-year of maturities.