Commodites, Miners Sell-off

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

U.S. stocks traded sideways as crude oil, natural gas, metals and agriculture commodities declined. The dollar rose against euro and British pound. Gold fell more than $10 an ounce. Natural resource stocks led the decliners. Coal miners, specialty chemicals, metals miners and steelmakers fell sharply. Potash Corp, Peabody Energy, U.S. Steel dropped more than 3%.

[R]10:20AM New York – U.S. stocks traded sideways as crude oil and metals fell.[/R]

U. S. stock traded sideways, a day after the U.S. Treasury nationalized Fannie and Freddie Mac. The long expected seizure leaves the fate of preferred shareholder fate unknown and more questions emerge about the future of two lending agencies. Lawmakers are likely to debate the future of the two lenders and role of the government in mortgage market as home prices continue to fall.

Crude oil in the early trading fell 1.7% or $1.87 to $104.47 and natural gas fell 4.7% or 35 cents to $7.17. Gold declined $10.10 o 1.26% to $792.40 an ounce. Silver dropped 1.2% or 12.50 cents to $11.93. Most agriculture commodities declined between 2% and 3%.

Stock Movers

Coal miners, steelmakers and fertilizer chemical companies fell sharply in the morning trading.

Alpha Natural Resources ((ANR)) dropped 8% or $6.40 to $67.16, Peabody Energy ((BTU)) declined $3.52 to $46.37 and Massey Energy fell $4.71 to $43.51.

ArcelorMittal ((MT)) dropped $2.15 to $60.12, U.S. Steel ((X)) dropped $5.61 to $102.00 and Nucor Corp ((NUE)) declined $2.50 to $44.17.

Potash Corp ((POT)) declined $8.43 or 5.5% to $144.82 and Intrepid Potash fell $3.33 to $34.29.

Mining companies traded lower for the fifth trading day in a row. BHP Billiton ((BHP)) dropped $2.74 or 4% to $56.85, Rio Tinto ((RTP)) declined $10.45 or 3% to $303.52, Freeport McMoran ((FCX)) dropped $3.77 or $68.31 and Sterlite Industries ((SLT)) dropped $1.69 to $11.70.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 223.81 or 1.77% to 12,400.65, Hang Seng index in Hong Kong decreased 303.16 or 1.46% closed to 20,491.11.ASX 200 index in Australia decreased 87.40 or 1.72% to close 4,980.10. The KL Composite index in Malaysia decreased 7.38 or 0.69% closed to 1,068.55.

The Kospi Index in South Korea decreased 22.15 or 1.50% to close at 1,454.50, SET index in Thailand closed lower 2.05 or 0.31% to 663.61 and JSE Index in Indonesia decreased 79.25 or 3.89% to 1,958.75. The Sensex index in India decreased 44.21 or 0.30% closed to 14,900.76.

Europe Markets Review

In London FTSE 100 Index traded higher 52.20 or 0.96% to 5,498.50, in Paris CAC 40 Index increased 29.39 or 0.68% to 4,369.57 and in Frankfurt DAX index traded higher 41.49 or 0.66% to 6,305.23. In Zurich trading SMI increased 103.64 or 1.44% to 7,281.06.

Earnings Review

Korn/Ferry International, a global recruitment firm reported first quarter revenues increase of 11% to $205.7 million from $185.4 million a year ago. Net income in the quarter fell 7.54% to $15.9 million or 36 cents per share compared to net income of $17.1 million or 36 cents per share, a year ago.

Korn/Ferry International ((KFY)) in the last one year traded as high as $21.00 in December 2007 and as low as $13.10 in January 2008. Based on the yesterday’s closing price the company has a market cap of $818.56 million.