Weakening Personal Spending, Oil Up

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

U.S. stocks fell in the morning after weaker than expected data on personal consumption and expenditure. Crude oil gained as tropical storm brewed in the Gulf of Mexico. A decline in earnings from Dell suggested a slower spending in the U.S. and earl signs of similar trends in Europe and Asia. Consumer spending in July rose 0.2% after rising at 0.6% in June according to the latest data from the Commerce Department. Personal income dropped 0.7% after rising 0.1% in June and 1.8% in May.

[R]9:55AM New York – U.S. stocks edge lower after the release of personal spending data, weak earnings from Dell and a rise in oil prices.[/R]

U.S. stocks fell in the morning after weaker than expected data on personal consumption and expenditure. Crude oil gained as tropical storm brewed in the Gulf of Mexico. A decline in earnings from Dell suggested a slower spending in the U.S. and earl signs of similar trends in Europe and Asia.

Consumer spending in July rose 0.2% after rising at 0.6% in June according to the latest data from the Commerce Department. Personal income dropped 0.7% after rising 0.1% in June and 1.8% in May.

Personal Consumption Expenditure increased 0.2% in the month after it gained 0.6% in June and the index jumped 4.5% from a year ago in July, the sharpest rise in the last 17 years. Real disposable personal income decreased 1.7% in July, compared with a decrease of 2.6% in June. Real PCE decreased 0.4%, compared with a decrease of 0.1%.

Crude oil prices rose more than $2 or 1.8% to $117.71 after Tropical Storm Gustav headed in the direction of oil installations in the Gulf of Mexico. UAL Corp ((UAUA)) dropped 28 cents to $10.75, AMR Corp ((AMR)) declined 40 cents to $9.60 and Federal Express ((FDX)) edged 60 cents lower to $83.29.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 304.62 or 2.39% to 13,072.87, Hang Seng index in Hong Kong increased 289.60 or 1.38% closed to 21,261.89.ASX 200 index in Australia increased 69.10 or 1.36% to close 5,135.60. The KL Composite index in Malaysia increased 30.40 or 2.81% closed to 1,100.50.

The Kospi Index in South Korea increased 0.09 or 0.01% to close at 1,474.24, SET index in Thailand closed higher 1.61 or 0.24% to 684.44 and JSE Index in Indonesia increased 21.10 or 0.98% to 2,165.94. The Sensex index in India increased 516.19 or 3.67% closed to 14,564.53.

Europe Markets Review

In London FTSE 100 Index traded higher 73.10 or 1.32% to 5,601.20, in Paris CAC 40 Index increased 88.41 or 2.02% to 4,461.49 and in Frankfurt DAX index traded higher 99.51 or 1.57% to 6,420.54. In Zurich trading SMI increased 103.76 or 1.46% to 7,190.40.

Earnings Review

Dell Inc, computer maker said second quarter sales rose 11% to $16.4 billion from $14.7 billion a year ago. Net income in the quarter fell 17% to $616 million or 31 cents per diluted share compared to net income of $746 million or 33 cents per share, a year ago.

Dell Inc ((DELL)) in the last one year traded as high as $30.77 in October 2007 and as low as $18.13 in April 2008. Based on the yesterday’s closing price the company has a market cap of $50.95 billion.

China Telecom Corporation Limited a provider of wire line telecommunications services in Shanghai municipality reported first half sales rose 1.5% to 89.4 billion yuan. Net income declined 4% to 11.6 billion yuan or $1.7 billion or 0.14 per share from 12 billion yuan or 0.15 per share for the same a year-ago.

China Telecom Corporation Limited ((CHA)) in the last one year traded as high as $98.66 in October 2007 and as low as $48.42 in August 2008. Based on the today’s closing price the company has a market cap of $41.44 billion.

Bradford & Bingley plc, the biggest lender to U.K. landlords said first-half net loss in the quarter was £17.2 million or 2.8 pence per diluted share compared to net income of £129 million or 20.4 pence per share, a year earlier.

Bradford & Bingley plc ((BB)) in the last one year traded as high as £51.75 in September 2007 and as low as £49.00 in July 2008. Based on the yesterday’s closing price the company has a market cap of £722.67 million.

Regus Group plc, the world''s largest provider of serviced offices based in the UK said first-half revenues jumped 23% to £508 million from £411.5 million a year earlier. Net income in the quarter rose 39% to £54 million or 5.6 pence per diluted share compared to net income of £44.5 million or 4.5 pence per share, a year earlier.

Regus Group plc ((RGU)) in the last one year traded as high as £137.00 in September 2007 and as low as £61.75 in August 2008. Based on the yesterday’s closing price the company has a market cap of £728.58 million.

Tata Steel Limited, the world’s sixth largest steel maker based in India said first quarter sales rose 28.37% to 435.08 billion rupees from 311.62 billion rupees a year ago. Net profit in the quarter increased 38.46% to 39.15 billion rupees compared to net profit of 24.09 billion rupees, a year ago.

Tata Steel Limited in the last one year traded as high as Rs.969.80 in January 2008 and as low as Rs.522.35 in August 2008. Based on the yesterday’s closing price the company has a market cap of Rs.435.57 billion.