Weak Home Sales, Metals; Dollar Rises

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

U.S. stocks edged higher as crude oil and natural gas futures rose and industrial metals fell but precious metals closed higher. New home sales in July fell compared to a year ago as tight lending conditions and falling confidence in the economy kept buyers away. The U.S. dollar rose against most major currencies. Stocks and ruble in Russia fell sharply as stand-off with NATO continues as Russia declared two regions independent from Georgia. German business and consumer confidence declines.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– new homes sales declined more than expected in July compared to a year ago. The U.S. dollar rose against euro and British and Australian dollars. Industrial metals fell, energy related futures rose and agriculture commodities closed mixed.[/R]

Global Markets Update

U.S. stocks edge higher after dollar gained in the international trading and new home sales rose. The home sales rose 2.4% to 515,000 units but declined 35% from a year ago. The dollar rose against all major currencies as economies around the world are expected to falter. The dollar rose sharply against the British pound, euro and Australian dollar. Restaurant stocks fell after Darden reported lower than expected earnings.

Stock market indexes in Japan fell as more evidence emerged of a global economic slowdown. Investors sought stocks linked to the domestic economy and sold stocks linked to exports to the U.S. and Europe. The U.S. dollar also strengthened against yen. Construction sector in Japan continue to take more casualties as more companies face tighter lending standards. Sebon Corp filed for bankruptcy protection with 62 billion yen in liabilities.

Stocks in Hong Kong edged lower but in Shanghai dropped 2.9% and dragged the CSI 300 index to a new low in the last fifteen months. Stocks struggled as companies battle a decline in revenue and earnings growth and tighter lending conditions. Chinalco received Australian government approval to increase its stake to 11% from 9%.

Stocks in Mumbai edged higher despite weak trading in global and regional trading. ONGC Videsh is preparing a bid to acquire Imperial Oil for £1.4 billion. Imperial has oil exploration rights in Russian Siberia region. HCL Technologies acquired telecom expense management company Control Point Solutions. Only a day ago Infosys agreed to acquire Axon Systems for £407 million. For the second calendar quarter economy is expected to grow at annual rate of 8.1%, slower than a year ago period.

Stocks in London fell marginally and tracked the volatility in crude oil futures and metals markets. A weak reading on German business and consumer confidence weighed on the trading in the European region. Home mortgage approval in UK in July fell 65% as lenders kept tighter control. Home equity loans hovered around 50% of total loans issued. Mortgage lending in the month rose £4.3 billion, the same rate as in June.

North American Markets indexes

Dow Jones Industrial Average increased 26.62 or 0.23% to a close of 11,412.87, S&P 500 Index closed up 4.67 or 0.36% to 1,271.51, and Nasdaq Composite Index decreased 3.62 or 0.15% to close at 2,361.97. In Toronto TSX Composite closed up 10.11 or 0.08% to 13,299.07.

Of the 30 stocks in Dow Jones Industrial Average 18 stocks gained, 12 declined and none was unchanged.

Microsoft Corp led decliners in Dow Jones Industrial Average with a loss of 1.4% followed by losses in Pfizer Inc of 1.2%, in Boeing Company 0.95%, in Verizon Communications of 0.64%, Procter & Gamble 0.4% and in IBM of 2.94%.

AIG led gainers in Dow Jones Industrial Average with a rise of 4.6% followed by gains in Home Depot Inc of 1.73%, in Exxon Mobil Corp of 1.6%, in JP Morgan Chase of 1.3%, in Citigroup of 1.3% and in Merck & Company of 1.2%.

Of the stocks in S&P 500 index, 303 increased, 186 declined and 11 were unchanged. Of the index stocks, 24 rose more than 3% and 14 fell more than 3%.

Freddie Mac led the gainers in the S&P 500 index with a rise of 21% followed by gains in Fannie Mae of 8.3%, in SLM Corp of 7.10%, in Coach of 3.80%, in Anadarko Petroleum of 6.40% and in Range Resources of 6.11%.

Darden Restaurants led decliners in the S&P 500 index with a loss of 12.4% followed by losses in big Lots Inc of 7.1%, in Tyson Foods of 5.9%, in Micron Tech of 5.6%, in CME Group Inc of 5.4%, in Lennar Corp of 5.1% and in Expedia Inc of 4.95%.

South American Markets Indexes

Mexico led decliners in the Latin American markets with a fall of 1.31% followed by decreases in Brazil of 0.22% and in Venezuela of 0.06% and Colombia of 0.07%.

Peru led advancers in the region with a rise of 2.06% followed by increases in Argentina of 0.9% and in Chile of 0.26%.

Europe Markets Review

In London FTSE 100 Index closed lower 34.90 or 0.63% to 5,470.70, in Paris CAC 40 Index increased 12.68 or 0.29% to close at 4,368.55 and in Frankfurt DAX index higher 43.57 or 0.69% to close at 6,340.52. In Zurich trading SMI increased 31.14 or 0.44% to close at 7,093.72.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 99.95 or 0.78% to 12,778.71, , Hang Seng index in Hong Kong decreased 48.13 or 0.23% closed to 21,056.66.ASX 200 index in Australia decreased 7.40 or 0.15% to close 5,007.50. The KL Composite index in Malaysia decreased 8.23 or 0.76% closed to 1,070.50.

The Kospi Index in South Korea decreased 11.86 or 0.79% to close at 1,490.25, SET index in Thailand closed lower 9.28 or 1.37% to 668.92 and JSE Index in Indonesia decreased 19.68 or 0.92% to 2,107.55. The Sensex index in India increased 31.87 or 0.22% closed to 14,482.22.

Commodities, Metals, and Currencies

Crude oil increased $1.14 to close at $116.25 a barrel for a front month contract, natural gas closed up 45 cent to $8.28 per mBtu and gasoline futures increased 8.89 cents to close at 297.12 cents per gallon.

Gold increased $4.00 in New York trading to close at $829.70 per ounce, silver closed down $0.23 cents to $13.71 per ounce and copper for the front month delivery decreased 4.80 cent to $3.41 per pound.

Wheat futures closed down 10.25 cents in Chicago trading and closed at $8.54 a bushel. Sugar increased 0.09 cent to 14.08 cents a pound. Soybean future closed down 2.50 cents to $13.44 a bushel.

Dollar edged higher and traded near record low against euro to $1.4650 and edged higher against yen to 109.63.

Yields on U.S. bonds unchanged to 3.78% with 10 years of maturities and decreased to 4.39% with 30-year of maturities.