U.S. Stocks Fall, Unemployment Rises

123jump.com Staff
01 Aug, 2008
New York City

A rise in unemployment, elevate crude oil prices and general worries related to the U.S. economy kept sellers in command. Unemployment in July rose to 5.7% from 5.5% in June and service sector along with manufacturing shed jobs. In earnings news, General Motors lost $15.5 billion in the quarter as it struggled with falling sales and strike at its plants in the quarter. IAEA approved unanimously a deal to inspect India''s civilian nuclear program. Brazil, Argentina and European markets drop.

4:15PM New York, 10:15PM Frankfurt, 6:15AM Sydney[R]– A rise in the U.S. unemployment dragged market averages lower. Brazil, Argentina and Mexico fell. Japan lost 1.8% for the week. European markets lost between 1% and 1.8%.[/R]

Global Markets Update

U.S. stocks fell after a rise in unemployment rate in July and weak earnings from several companies including General Motors. In the month U.S. shed 51,000 jobs matching losses in June and unemployment rate rose to 5.7% from 5.5% in June. Except government sector all other sectors in the economy shed jobs. General Motors reported quarterly loss of $15.5 billion or $27.33 a share on worldwide sales decline of 18% to $38.2 billion.

Stocks in Japan closed lower after weak earnings from Sumitomo Mitsui Financial Group and NEC disappointed investors. For the week, Nikkei 225 index fell 1.8% and in Friday trading lost 2.1%. SMFG reported net income decline of 51% to 58 billion yen as ordinary income declined 5% from a year ago. NEC Corp reported net income fell 50.4% to 483 million yen and revenue decline of 0.7%. Commodities and financial stocks fell in the session.

Positive comments from the President Jintao lifted stock market averages in Hong Kong and Shanghai. His comments appeared pro growth, lifting stocks in the banking and industrial sectors. China reported urban unemployment dropped in the first half to 4%. Hong Kong in the first fiscal quarter ending in June reported a deficit of HK$16.5 billion and in June of HK$10.8 billion.

UK manufacturing index in July dropped to a decade low as domestic orders fell the most in nine years. Separately, corporate insolvencies rose 15% from a year ago in the second quarter. British Airways first quarter plummeted 90% to £27 million from £274 million a year ago period. Banks and retailers participated on the gainers list. Elan Corp dropped 50% after it reported two cases of deaths with patients treated with Tysabri to treat neurological and muscular disorders.

North American Markets indexes

Dow Jones Industrial Average decreased 51.70 or 0.45% to a close of 11,326.32, S&P 500 closed down 7.07 or 0.56% to 1,260.31, and Nasdaq Composite Index decreased 14.59 or 0.63% to close at 2,310.96. In Toronto TSX Composite closed down 91.80 or 0.68% to 13,501.12.

Of the 30 stocks in Dow Jones Industrial Average 13 stocks gained, 17 declined and none was unchanged.

Coca-Cola Company led the gainers in the Dow Jones Index with a rise of 2.97% followed by increases in AIG of 2.8%, in Merck & Company of 1.76% and in Boeing Company of 0.10%.

General Motors led decliners in the Dow Jones Industrial Average with a loss of 6.5% followed by losses in Alcoa Inc of 4.98%, in Hewlett Packard of 2.03%, in Caterpillar of 1.9% and in Wal-Mart Stores of 1.5%.

Of the stocks in S&P 500 index, 236 increased, 260 declined and 4 were unchanged. Of the index stocks 34 stocks rose more than 3% and 41 fell more than 3%.

Biogen IDEC Inc led the decliners in the S&P 500 index with a loss of 28.2% followed by losses in NYSE Euronext of 13.1%, in Sun Microsystems of 12.3%, in Consol Energy of 8.4%, in CME Group Inc of 7.4%, in CA Inc of 6.3% and in PPL Corp of 6.20%.

MBIA Inc led the gainers in the S&P 500 index with a rise of 29% followed by gains in MGIC Investment Corp of 13.75%, in Wachovia Corp of 12.5%, in Lehman Brothers of 8.02%, in National City Corp of 7.8% and in Zions Bancorp of 5.3%.

South American Markets Indexes

Brazil led decliners in the Latin American markets with a fall of 2.8% followed by decreases in Argentina of 1.96%, in Mexico of 1.90%, in Chile of 0.90% and in Venezuela of 0.02%.

Peru led gainers in the region with a rise of 0.40% followed by increases in Colombia of 0.27%.

Europe Markets Review

In London FTSE 100 Index closed lower 57.20 or 1.06% to 5,354.70, in Paris CAC 40 Index decreased 78.02 or 1.78% to close at 4,314.34 and in Frankfurt DAX index lower 83.10 or 1.28% to close at 6,396.46. Markets in Zurich were closed today.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 282.22 or 2.11% to 13,094.59, Hang Seng index in Hong Kong increased 131.50 or 0.58% closed to 22,862.60. ASX 200 index in Australia decreased 73.40 or 1.47% to close 4,904.00. The KL Composite index in Malaysia decreased 3.99 or 0.34% closed to 1,159.10.

The Kospi Index in South Korea decreased 20.90 or 1.31% to close at 1,573.77, SET index in Thailand closed higher 2.34 or 0.35% to 678.66 and JSE Index in Indonesia decreased 55.76 or 2.42% to 2,248.75. The Sensex index in India increased 300.94 or 2.10% to 14,656.69.

Commodities, Metals, and Currencies

Crude oil decreased 91 cents to close at $124.99 a barrel for a front month contract, natural gas closed up 28 cents to $9.40 per mBtu and gasoline futures increased 1.510 cents to close at 308.66 cents per gallon.

Gold decreased $5.20 in New York trading to close at $917.50 per ounce, silver closed down 27 cents to $17.52 per ounce and copper for front month delivery decreased 8.35 cent to $3.570 per pound.

Wheat futures closed up 10.25 cents in Chicago trading and closed at $7.94 per bushel. Sugar increased 0.06 cent to 13.99 cents per pound. Soybean future closed down 39.00 cents to $13.65 a bushel.

Dollar edged higher and traded near record low against euro to $1.5539 and edged lower against yen to 107.74.

Yields on U.S. bonds decreased to 3.94% with 10 years of maturities and decreased to 4.57% with 30-year of maturities.