Volatile Oil, Metals Drive Global Stocks

123jump.com Staff
03 Sep, 2008
New York City

U.S. stocks closed lower led by a decline in energy, mining and technology stocks. The Bank of Canada left its key rate unchanged at 3% and Australia reported weak economic data for the second quarter. Euro zone economy in the second quarter shrank at 0.2% from the first quarter and retail sale in July fell 0.4%. Coca-Cola Company agreed to acquire China Huiyuan Juice Group for HK$19.6 billion or $2.5 billion. For the third day in a row, Brazil fell more than 1% and led decliners in the region.

4:00PM New York, 10:00PM Frankfurt, 6:00AM Sydney[R]– U.S., Canada and European stocks declined as crude oil and metals prices fell.[/R]

Global Markets Update

U.S. stocks edged lower as crude oil prices fell below $108 a barrel. Base and precious metals prices declined dragging stock benchmarks in Canada and UK lower. The Bank of Canada left its key rate unchanged at 3% and Australia reported weak economic data for the second quarter. Euro zone economy in the second quarter shrank at 0.2% from the first quarter and retail sale in July fell 0.4%.

Japan stocks edged higher after crude oil declined in the region to a three-month low. A steady decline in oil and natural gas prices in the last five trading days added another impetus to stocks in consumer goods, retailing, paper and tire manufacturing companies. Mitsubishi UFJ may increase its stake in consumer lender Acom to 40% from 15%.

Coca-Cola Company agreed to acquire China Huiyuan Juice Group for HK$19.6 billion or $2.5 billion including convertible bonds and diluted shares. The agreement values the juice maker at HK12.20 a share, nearly three times is most recently traded price near HK$4.10 a share. The offer values the company at 17 times operating earnings of 2007.

Stocks in Sydney fell as oil and commodities prices declined for the second week in a row. The price of oil had surged nearly 100% from last June to $147 a barrel in July of this year before declining to $108 a barrel today’s trading. Babcock & Brown led advancers in the ASX 200 index shares with a rise of 11% followed by gains in Emeco Holdings of 9.2% and in Babcock & Brown of 6.5%.

North American Markets

Dow Jones Industrial Average increased 15.96 or 0.14% to a close of 11,532.88, S&P 500 Index closed down 2.60 or 0.20% to 1,274.98, and Nasdaq Composite Index decreased 15.51 or 0.66% to close at 2,333.73. In Toronto TSX Composite closed down 161.82 or 1.22% to 13,137.72.

Of the 30 stocks in Dow Jones Industrial Average 17 stocks gained, 13 declined and one was unchanged.

Intel led decliners in Dow Jones Industrial Average with a loss of 4.61% followed by losses in Alcoa Inc of 2.2%, in Hewlett Packard 1.98% and in Caterpillar Inc of 1.95%.

General Motors led gainers in Dow Jones Industrial Average with a rise of 5.8% followed by gains in Home Depot of 4.5%, in AIG of 2.8%, in Citigroup Inc of 2.6%, in United Technologies of 1.90% and in JP Morgan Chase of 1.9%.

Of the stocks in S&P 500 index, 259 increased, 239 declined and 2 were unchanged. Of the index stocks, 33 rose more than 3% and 50 fell more than 3%.

MGIC Investment Corp led the gainers in the S&P 500 index with a rise of 13.90% followed by gains in E*Trade Financial of 8.3%, in Tesoro Corp of 8.10%, in Qwest Communication of 6.75%, in Newell Rubbermaid of 6% and in Tenet Healthcare of 5.92%.

Forest Labs Inc led decliners in the S&P 500 index with a loss of 14.31% followed by losses in Corning Inc of 12.6%, in MEMC Electrical Materials of 11.9%, in Conagra Foods of 8.5%, in Altera Corp of 6.9%, in Hess Corp of 6.9% and in Akamai Tech of 6.40%.

South American Markets Indexes

The lone gainers Argentina in the region closed up 0.01%.

Brazil led decliners in the region with a fall of 1.6% followed by decreases in Chile of 0.86% in Peru of 0.5%, in Colombia of 0.29%, in Mexico of 0.21% and in Venezuela of 0.04%.

Europe Markets Review

In London FTSE 100 Index closed lower 121.00 or 2.15% to 5,499.70, in Paris CAC 40 Index decreased 91.94 or 2.03% to close at 4,447.13 and in Frankfurt DAX index lower 50.98 or 0.78% to close at 6,467.49. In Zurich trading SMI decreased 41.96 or 0.57% to close at 7,256.63.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.12 or 0.64% to 12,689.59, Hang Seng index in Hong Kong decreased 457.40 or 2.17% closed to 20,585.06.ASX 200 index in Australia decreased 56.00 or 1.09% to close 5,060.00.

The Kospi Index in South Korea increased 19.75 or 1.40% to close at 1,426.89, SET index in Thailand closed lower 9.58 or 1.45% to 649.93 and JSE Index in Indonesia decreased 43.05 or 1.99% to 2,116.00. Market of India was closed today.

Commodities, Metals, and Currencies

Crude oil decreased $0.23 to close at $109.48 a barrel for a front month contract, natural gas closed increased 1 cent to $7.27 per mBtu and gasoline futures decreased 6.25 cents to close at 276.70 cents per gallon.

Gold decreased $5.00 in New York trading to close at $805.50 per ounce, silver closed down $0.14 cents to $13.005 per ounce and copper for the front month delivery increased 3.25 cent to $3.30 per pound.

Wheat futures closed up 8.00 cents in Chicago trading and closed at $7.74 a bushel. Sugar decreased 0.20 cent to 12.51 cents a pound. Soybean future closed down 47.50 cents to $12.51 a bushel.

Dollar edged higher against euro to $1.44003 and edged higher against yen to 108.185.

Yields on U.S. bonds decreased to 3.70% with 10 years of maturities and decreased to 4.32% with 30-year of maturities.