Financials, Realtors Rise; Oil, Copper Drop

123jump.com Staff
08 Jul, 2008
New York City

Financials, home builders and real estate trust stocks rose sharply after the regulator statement on Fannie Mae and Freddie Mac. Energy and mining stocks declined as crude oil, natural gas and precious and base metal prices fell. Airlines, freight transportation and railroads rallied on falling oil. European markets closed lower on the continued worries related to the health of U.S. banks. Copper, corn, gasoline and crude oil futures drope between 3% and 4%.

5:30PM New York, 11:30PM Frankfurt, 7:30AM Sydney[R]– U.S. stock averages closed higher after a rally in financial stocks. Home builders, real estate trusts and mortgage lenders led the rally.[/R]

Global Markets

U.S. stocks closed higher after wholesale sales rise in May. Commodities prices fell for the third day with a sharp decline in crude oil, natural gas and base metal prices. The Federal Reserve chief Bernanke proposes to widen Fed role and increase lending to financial brokerage firms. Fannie Mae and Freddie Mac may not have to seek additional capital according to regulator that regulates two mortgage lenders. After the close Alcoa reported earnings of 71 cents per share excluding one-time charge of 5 cents per.

Fannie Mae and Freddie Mac were the focus of investors for the second day, after the top regulator said that it will not seek the two lenders to seek additional capital on accounting change. Office Depot plunged 32% after same store sales fell 10% in the second quarter. VMWare dropped 26% after it lowered its sales outlook and replaced its chief executive. Goodrich Petroleum commenced 3 million shares offering to pay long term debt. Banks, brokerages and home builders rallied.

Japan market indexes traded in the negative territory led by financial stocks on resurgent credit worries after Lehman Brothers noted that the new accounting rule in the U.S. may force Freddie Mac and Fannie Mae to raise an additional $75 billion to meet capital requirements. Sumitomo Realty led decliners in the Nikkei 225 with a drop of 6.21% followed by losses in Mizuho Trust & Banking and Nissan Chemical Industries.

Hong Kong stock market plummeted as U.S. credit concerns and regional declines affected investor sentiment. Most Asian markets also lost ground Tuesday. Aluminum Corp. lost 5.6% on reports that it may see lower output at two of its mainland plants. China Petroleum & Chemical Corp. fell 2.7% despite lower crude prices, while CNOOC lost 3.4%. In export-related stocks, Foxconn International, handset manufacture, was downgraded and shed 10.3%.

Stocks in India declined tracking losses in Asia and other global markets. Communist and other regional parties withdrew their support to the ruling coalition led by Congress Party. The Congress Party has sought and secured support from a regional party and is likely to complete its full term. Tata Motors dropped 4% and has fallen nearly 60% from its peak seven months ago. Reliance Industries fell below 2,000 rupees.

North American Markets indexes

Dow Jones Industrial Average increased 152.25 or 1.36% to a close of 11,384.21, S&P 500 closed up 21.39 or 1.71% to 1,273.70, and Nasdaq Composite Index increased 51.12 or 2.3% to close at 2,294.44. In Toronto TSX Composite closed up 96.97 or 0.71% to 13,809.77.

Of the 30 stocks in Dow Jones Industrial Average 22 stocks gained and 8 declined.

Alcoa led the decliners in the Dow Jones Index with a fall of 3.2% followed by decreases in Caterpillar of 1.8%, in Hewlett Packard of 1.30%, in Exxon Mobil of 1.2%, in Chevron of 1.1% and in Microsoft of 0.7%.

Bank of America led the gainers in the Dow Jones Index with a rise of 9.4% followed by increases in Citigroup of 6.1%, in AIG of 5.6%, in General Motors of 5.3% and in American Express of 5%.

Of the stocks in S&P 500 index, 406 increased, 93 declined and 1 was unchanged. Of the index stocks 188 stocks rose more than 3% and 16 fell more than 3%.

Office Depot led the decliners in the S&P 500 index with a loss of 32% followed by declines in EMC Corp of 11.6%, in U.S. Steel 4.5%, in Nucor Corp of 4.4%, in Chesapeake Energy of 4.3% and in Corning of 4.2%.

MGIC led the gainers in the S&P 500 index with a rise of 29.0% followed by gains in MBIA of 21.7%, in WaMu of 16.5%, in Huntington Banc of 16.2%, in Lennar Corp of 15.2% and in First Horizon of 14%.

South American Markets Indexes

Peru led the decliners in the Latin American markets with a loss of 3.5% followed by losses in Colombia of 1.5%, in Argentina of 0.39%, in Venezuela of 0.16%.

Chile led the gainers in the region with a rise of 0.86% followed by increases in Brazil of 0.76% and in Mexico of 0.59%.

European Markets Indexes

The CAC 40 fell 66.98 or 1.54% to 4,275.61. In Germany the DAX 30 index decreased 91.34 or 1.43% to 6,304.41. Swiss Market index dropped 27.60 to 6,788.13. The FTSE 100 index closed down 72.20 or 1.31% to 5,440.50.

Asian markets

The Nikkei 225 Index in Tokyo closed lower 326.94 or 2.45% to 13,033.10, Hang Seng index in Hong Kong decreased 692.25 or 3.16% closed to 21,220.81. ASX 200 index in Australia decreased 69.60 or 1.39% to close 4,932.90. The KL Composite index in Malaysia decreased 6.01 or 0.53% closed to 1,121.25.

The Kospi Index in South Korea decreased 46.25 or 2.93% to close at 1,533.47, SET index in Thailand closed lower 8.06 or 1.10% to 722.50 and JSE Index in Indonesia decreased 24.84 or 1.08% to 2,278.97. The Sensex index in India decreased 176.34 or 1.30% to 13,349.65.

Commodities, Metals, and Currencies

Crude oil decreased $5.35 to close at $136.02 a barrel for a front month contract, natural gas closed down to 66 cents to $12.32 per mBtu, and gasoline futures increased 73.16 cents to close at 349.00 cents per gallon.

Gold decreased $5.50 in New York trading to close at $923.30 per ounce, silver closed up 0.035 cents to $17.95 per ounce, and copper for front month delivery decreased 15.25 cent to $3.69 per pound.

Wheat futures increased 0.50 cent in Chicago trading and closed at $8.36 per bushel. Sugar increased 23 cent to $13.75 per pound. Soybean future closed down 31.50 cents to $15.29 a bushel.

Dollar edged higher and traded near record low against euro to $1.5664 and rose against yen to 107.51.

Yields on U.S. bonds decreased to 3.88% with 10 years of maturities and decreased to 4.45% with 30-year of maturities.