Late Rally in Financials, Metals Fall

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

U.S. stocks recovered at close on a strength in financial stocks. Unemployment rose in August to 6.1%, a five-year high. European markets closed lower and Russia declined the most with a loss of 4%. Brazil, the lone gainer in the Latin markets closed higher after the benchmark index fell for four days in a row. A sharp drop in metals and commodities prices dragged Peru, Chile and UK. Nokia fell as much as 12% after it guided lower third quarter market share.

4:00PM New York, 10:00PM Frankfurt, 6:00AM Sydney[R]– U.S. stocks recovered at close on a strength in financial and energy sectors. European markets closed higher. Russia declined close to 4%. Brazil, the lone gainer in the Latin markets closed up after index fell for four days in a row.[/R]

Global Markets Update

U.S. benchmark indexes fell as much as 2% in the morning after the release of August unemployment data but managed to close higher. The jobless rate increased to 6.1% from 5.7% and number of people unemployed increased by 84,000. Stocks fell quickly as crude oil and metals declined. Stock indexes around the world fell, as investors showed aversion to risk. Russian market and currency fell sharply after investors flee Russia on continued fall in commodities prices and an ongoing conflict with Georgia.

Stocks in Japan fell on the worries that weak global markets and rising commodities prices will lower exports and earnings of local companies. That economic view was reinforced by 7.6% decline in capital spending in the second quarter. Steelmakers and exporters fell sharply. Finance ministry reported a decline in reserve of $7.9 billion to $996 billion and stated that it held 24.6 million ounces of gold.

UK stocks fell 2.3% after commodities and crude oil prices in the region declined. Informa rejected a lowered offer from a consortium of private equity investors and held out for a higher offer. The troubled mortgage lender HBOS plc is exploring a possible sale of its Australian units. Johnson Matthey led decliners in the FTSE 100 index shares with a fall of 8.5% followed by losses in Kazakhmys Plc of 8.2%, in Eurasian Natural of 7.6%, in Ferrexpo Plc of 7.1%, and Antofagasta of 7%.

Stocks in Mumbai dropped sharply as new information emerged on nuclear deal with the U.S. The Bush administration has conditioned that the supply of the nuclear material will halt if India lifted its moratorium on nuclear tests. The condition violated sovereign right of India to test and BJP and other opposition parties immediately demanded resignation of the prime minister. Financials, realty and telecom stocks fell as weak closing of the global markets dragged the index 2.8% lower.

North American Markets

Dow Jones Industrial Average increased 32.73 or 0.29% to a close of 11,220.96, S&P 500 Index closed up 5.48 or 0.44% to 1,242.31, and Nasdaq Composite Index decreased 3.16 or 0.14% to close at 2,255.88. In Toronto TSX Composite closed up 2.28 or 0.02% to 12,816.42.

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

Microsoft led decliners in Dow Jones Industrial Average with a loss of 2.66% followed by losses in Chevron Corp of 1.2%, in United Technologies 1.23% and in Alcoa Inc of 0.91%.

Bank of America led gainers in Dow Jones Industrial Average with a rise of 5.4% followed by gains in AIG of 5.3%, in JP Morgan Chase of 4.5%, in Citigroup Inc of 4.2%, in American Express of 1.70% and in Wal-Mart Stores of 1.6%.

Of the stocks in S&P 500 index, 298 increased, 200 declined and 2 were unchanged. Of the index stocks, 59 rose more than 3% and 15 fell more than 3%.

SanDisk led the gainers in the S&P 500 index with a rise of 31.06% followed by gains in UST Inc of 25.1%, in Comercia Inc of 10.60%, in Huntington Banc of 10.45%, in Fannie Mae of 9.7% and in Marshall & Ilsley of 9.3%.

Exelon Corp led decliners in the S&P 500 index with a loss of 8.00% followed by losses in Federated Investments of 7.7%, in Jabil Circuit of 5.4%, in Abercrombie & Fitch of 4.7%, in Embarq Corp of 4.4%, in Gilead Sciences of 4.3% and in Masco Corp of 4%.

South American Markets Indexes

The lone gainers Brazil in the region closed up 1.03%.

Peru led decliners in the region with a fall of 2.3% followed by decreases in Mexico of 0.95% in Argentina of 0.94%, in Chile of 0.85%, in Colombia of 0.82% and in Venezuela of 0.48%.

Europe Markets Review

In London FTSE 100 Index closed lower 121.40 or 2.26% to 5,240.70, in Paris CAC 40 Index decreased 107.35 or 2.49% to close at 4,196.66 and in Frankfurt DAX index lower 152.13 or 2.42% to close at 6,127.44. In Zurich trading SMI decreased 108.06 or 1.53% to close at 6,976.59.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 345.43 or 2.75% to 12,212.23, Hang Seng index in Hong Kong decreased 456.20 or 2.24% closed to 19,933.28.ASX 200 index in Australia decreased 102.40 or 2.06% to close 4,877.10. The KL Composite index in Malaysia decreased 14.52 or 1.34% closed to 1,070.54.

The Kospi Index in South Korea decreased 22.05 or 1.55% to close at 1,404.38, SET index in Thailand closed lower 9.05 or 1.38% to 645.80 and JSE Index in Indonesia decreased 52.67 or 2.54% to 2,022.56. The Sensex index in India decreased 415.27 or 2.79% closed to 14,483.83.

Commodities, Metals, and Currencies

Crude oil decreased $1.49 to close at $106.40 a barrel for a front month contract, natural gas increased 13 cent to $7.45 per mBtu and gasoline futures decreased 4.99 cents to close at 269.05 cents per gallon.

Gold increased $2.70 in New York trading to close at $805.90 per ounce, silver closed down $0.66 cents to $12.275 per ounce and copper for the front month delivery decreased 14.50 cent to $3.12 per pound.

Wheat futures closed down 25.50 cents in Chicago trading and closed at $7.51 a bushel. Sugar decreased 0.11 cent to 12.54 cents a pound. Soybean future closed down 58.50 cents to $11.77 a bushel.

Dollar edged higher against euro to $1.4238 and edged lower against yen to 107.625.

Yields on U.S. bonds decreased to 3.69% with 10 years of maturities and decreased to 4.30% with 30-year of maturities.