Anheuser Surges, Weak Home Sales

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

Existing home sales in April fell 1% from March and 18% from a year ago. Inventories of unsold homes rose to a 11-month high, indicating rising sale cycle. Median home prices fell 8%. The weak housing market data dragged market averages and stocks in banking and home building segments. Anheuser Busch led the gainers in S&P 500 on a possible bid from InBev at $65 a share or at $46.6 billion.

10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney[R]– U.S. stocks closed lower on the worries related to more losses at banks and rising inflation. Sales of existing homes fell sharply.[/R]

Global Markets Update

Global markets retreated after Asian markets closed down, European markets trend lower and the U.S. indexes fell. Crude oil spiked above $133 a barrel. The weather forecast from the U.S. suggested busy hurricane season with a possibility of 9 significant hurricanes. Home sales in April fell 1% from March and 18% from a year ago as inventories of unsold homes surged 11 moths or 4.55 million homes. Median home prices fell 8%. The continued weakness in the housing market dragged home builders, banks and brokerage stocks down. BHP and Rio Tinto fell in the European trading as investors book profit in the sector. Metals and mining stocks have surged nearly 45% in two months.

European markets declined after a regional survey of manufacturing and services organization showed a weakest read in several years. The index in May fell to 51.1 from 51.9 in April. Separately first quarter economic growth in Italy increased at 0.4% from the fourth quarter and rose at 0.2% from a year ago. Volkswagen reported 10.5% vehicles sales rise in April and for the first four months global deliveries rose 7.9% to 2.14 million vehicles.

UK Service sector index that tracks output rose only 0.5% in the quarter ending in March, according to government statistics released by the ONS. The anemic rise in the service sector dragged stocks lower. The output fell fractionally in the last two months. Separately, Halliburton made an offer to purchase Expro International at 1,525 pence, 7% higher than the offer from Candover Partners. Expro jumped 6% to close above the offer price from Halliburton.

In India, rising inflation and elevated crude oil prices dragged stocks lower. Sensex fell 1.5% or 257.47 to 16,649.64 and NSE declined 1.6% to 4,946.55. The stocks fell for the second day in a row on a weakness in realty, energy and metals and mining companies. After the release of wholesale inflation report banks and realty stocks fell. Software company TCS won an order of 1,000 crore rupees to process passport applications from the Indian government.

European Markets indexes

In London FTSE 100 Index closed lower 94.30 or 1.53% to 6,087.30, in Paris CAC 40 Index decreased 94.97 or 1.89% to close at 4,933.77 and in Frankfurt DAX index lower 126.28 or 1.79% to close at 6,944.05. In Zurich trading SMI decreased 118.09 or 1.56% to close at 7,459.94.

North American Markets indexes

Dow Jones Industrial Average fell 145.99 or 1.16% to a close of 12,479.63, S&P 500 closed down 18.42 or 1.32% to 1,375.93, and Nasdaq Composite Index decreased 19.91 or 0.81% to close at 2,444.67. In Toronto TSX Composite closed down 69.00 or 0.47% to 14,723.36.

Of the 30 stocks in Dow Jones Industrial Average, 3 closed higher, 27 closed lower, and none were unchanged.

General Motors led the decliners in the Dow Jones Industrial Index with a loss of 4.8% followed by losses in Citigroup of 2.6%, in AIG of 2.4%, in United Technologies of 2.4% and in Bank of America of 2.2%. Coca Cola led the gainers in the Dow Jones Index with a rise of 0.7% followed by gains in Hewlett Packard of 0.27% and in Boeing of 0.15%.

Of the stocks in S&P 500 index, 45 stocks increased, 451 declined, and 4 were unchanged. Of the stocks in the index, 39 stocks fell more than 3% and 3 gained more than 3%.

MBIA led the decliners in the S&P 500 index with a loss of 8.1% followed by losses in Lehman Brothers of 7.2%, in Goodyear Tire of 5.4%, in MGIC of 5.14% and in KB Home of 4.8%. Anheuser Busch led the gainers in the S&P 500 index with a rise of 7.8% followed by gains in Qualcomm of 3.9%, in CA Inc of 3.5%, in SLM Corp of 2.8% and in Broadcom of 2.6%.

South American Markets Indexes

Venezuela led the decliners in the Latin American markets with a fall of 1.9% followed by decreases in Peru of 1.26% and in Brazil of 1.2%. Colombia fell 0.7% and Argentina and Mexico declined 0.6%. Chile, the lone gainer in the region rose 0.08%.

Asian markets

In Tokyo Nikkei 225 Index closed lower 33.74 or 0.24% to 14,012.20, in Hong Kong Hang Seng index decreased 329.05 or 1.31% closed to 24,714.07. In Australia ASX 200 index lower 58.90 or 1.01% to close 5,768.00. In Malaysia KL Composite index decreased 2.79 or 0.22% closed to 1,274.78.

In South Korea Kospi Index decreased 7.48 or 0.41% to close at 1,827.94, in Thailand SET index closed higher 1.05 or 0.12% to 875.59 and Indonesia JSE Index edged decreased 38.00 or 1.52% to 2,465.96. Sensex index in India decreased 257.47 or 1.52% to 16,649.64.

Commodities, Metals, and Currencies

Crude oil increased $1.03 to close at $131.84 a barrel for a front month contract, natural gas increased 21 cents to $11.91 per mBtu, and gasoline futures increased 6.8 cents to close at 339.80 cents per gallon.

Gold increased $7.50 in New York trading to close at $925.80 per ounce, silver closed up 26 cents to $18.29 per ounce, and copper for front month delivery increased 2.30 cents to $3.73 per pound.

Wheat futures increased 7.50 cent in Chicago trading and closed at $7.52 per bushel. Sugar decreased 42 cent to $10.01 per pound. Soybean future closed up 43.250 cents to $13.68 a bushel.

Dollar edged higher and traded near record low against euro to $1.5773 and rose against yen to 103.31.

Yields on U.S. bonds decreased to 3.84% with 10 years of maturities and decreased to 4.57% with 30-year of maturities.