Zions, Banks Lead S&P Decliners

123jump.com Staff
17 Jun, 2008
New York City

U.S. stocks edged lower after an increase in producer price index and a continued weakness in new home construction dragged market indexes lower. Shipping lines and ocean freight companies led the gainers in trading as Baltic Dry Index rebounded. Crude oil traded lower. Zions Bancorp led the decliners in S&P 500 index after it estimated additional losses related to home loans. Goldman Sachs joined a chorus of bankers that suggest that the U.S. banks will need $65 billion to cover losses.

[R]2:00PM New York – U.S. stocks traded lower. Shipping companies led the gainers.[/R]

More economic data in the U.S. confirm the rising inflation at wholesale level and persistent weakness in the housing market.

The Labor Department reported May producer price index rose 1.4% on rising food and energy prices after gaining 0.2% in April. The increase in the index was higher than a rise of 1.3% that few economists had estimated. The index is likely to inch as higher as crude oil prices have edged higher since the completion of the report.

The Commerce Department reported May housing starts fell 3.3% to 975,000 and building permits dropped 1.3% to 969,000. The housing starts have been lagging as mortgage availability has declined in the last one year.

The Goldman Sachs Group, Inc, a global investment banking service company reported second quarter revenues decreased 8.06% to $9.42 billion from $10.18 billion a year ago. Net income in the quarter declined 11.78% to $2.09 billion or $4.58 per diluted share compared to net income of $2.33 billion or $4.93 per share, a year ago.

Investment banking revenue slid 2% from the year before to $1.69 billion, as debt underwriting weakened. For the quarter, the company said revenue from equities was flat at $2.49 billion, and revenue from equity underwriting rose to $616 million. Net revenues in asset management and securities services at $2.15 billion, were 18% higher on prior year.

The Goldman Sachs Group, Inc ((GS)) in the last one year traded as high as $250.70 in October 2007 and as low as $140.27 in March 2008. Goldman Sachs shares were down 0.57% or $1.18 at $181.02 in early morning trade Tuesday. The stock has risen modestly over the past week, and over the past 52 weeks has traded in the range $140.27 to $250.70.

Based on the yesterday’s closing price the company has a market cap of $71.78 billion.

North American Market indexes

Dow Jones Industrial Average fell 63.34 or 0.52% to 12,205.74, S&P 500 declined 0.22 or 3.06% at 1,357.08, and Nasdaq Composite Index dropped 3.67 or 0.15% at 2, 471.11. In Toronto TSX Composite advanced 124.98 or 0.84% at 15,069. 26.

Of the 30 stocks in Dow Jones Industrial Average 12 rose and 8 declined.

Chevron Corp. led advancers in the Dow Jones Industrial Average with a gain of 1.13% followed by increases in General Motors of 0.92%, in Du Point of 0.81%, in Exxon Mobile Corp of 0.67%, and Hewlett-Packard of 0.25%. America Express led decliners in the Dow Jones index with a drop of 3.67% followed by losses in America International Group of 2.57%, in Bank of America of 2.34%, in Home Depot of 1.85% and JP Morgan Chase of 1.83%.

Of the stocks in S&P 500 index, 177 increased, 321 declined, and 2 were unchanged.

Wyeth led gainers in the S& P 500 index with a rise of 5.83% followed by rises in CME Group Inc of 5.65%, in Range Resources of 3.88%, in Monsanto Co of 3.81%, and Noble Energy Inc of 3.79%. Zions Bancorp led decliners in the S & P 500 index shares with a drop of 10.09% followed by declines in SunTrust Banks of 7.72%, in Centex Corp. of 7.27%, in WaMu Inc of 6.59%, and National City Corp. of 6.30%.

South American Markets Indexes

Brazil led advancers in the Latin American markets with an increase of 1.41% followed by rises in Chile 0.70%, in Argentina of 0.47%, and Mexico of 0.08%.

Colombia led the decliners with a slump of 0.14% followed by Mexico plummeting 0.08%.