Bernanke, Paulson Fail to Impress Markets

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

Stocks in the Americas and Europe fell as more lawmakers voice their concerns on the lack of details about the U.S. bailout plan. The Fed chairman Bernanke and Treasury secretary Paulson failed to convice lawmakers why they need $700 billion and why there should not be more debate. Brazil falls 4%.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– The U.S. lawmakers appear to be not convinced with the U.S. Treasury and Fed bailout plan that asks for quick approval and unlimited authority.[/R]

Global Markets

U.S. stocks accelerate their losses as lawmakers debate the details and size of the bailout plan. Executive compensation, the nature of auctions and regulatory oversights are some of the key concerns of the senators of both parties. Crude oil and metals prices fell on global worries. Dollar traded lower against euro and Japanese yen. Nomura agrees to buy Lehman banking asset in Europe and Middle East.

European stock markets declined as mining and financial stocks fell. Investors are increasingly voicing their concerns with the lack of details in the U.S. $700 billion bailout plan which dragged financial stocks lower. Metal prices fall dragged mining companies in the region.

Hong Kong and Shanghai stocks fell 3.8% after investors worried that the U.S. bailout plan will spread inflation around the world. Transportation stocks fell after crude oil jumped. Mining stocks rose. China to issue 25 billion yuan in treasury bonds at 3.68% interest rate.

Benchmark stock index in India dropped more than 3% after nine domestic banks are estimated to have 2,000 crore rupees exposure to the U.S. financial crisis. ICICI Bank, HDFC Bank and State Bank of India dropped. Realty stocks fell after worries of the economic slowdown gripped investors.

Stocks in Australia fell as investors in the region sold financial stocks. Metals and crude oil prices surged as the U.S. dollar dropped. Sino Gold led the gainers in the ASX 200 index with a rise of 16% followed by gains in Babcok & Brown of 13%.

North American Markets

Dow Jones Industrial Average decreased 161.52 or 1.47% to a close of 10,854.17, S&P 500 Index closed down 18.87 or 1.56% to 1,188.22, and Nasdaq Composite Index decreased 25.64 or 1.18% to close at 2,153.34. In Toronto TSX Composite closed down 105.44 or 0.83% to 12,532.63.

Of the 30 stocks in Dow Jones Industrial Average 3 closed higher and 27 closed lower.

American Express led gainers in Dow Jones Industrial Average with a rise of 2.65% followed by increases in Intel Corp of 0.70%, in Microsoft Corp of 0.16%. Microsoft announced yesterday an increase in its dividend by 18% and plans to buy back $40 billion of its stock in the next five years. The company plans to alter its capital structure and issue commercial paper for the first time.

General Motors led decliners in the index with a loss of 7.43% followed by losses in General Electric of 4.6%, in Alcoa Inc of 4.5% and in Verizon Communications of 3.1%.

Of the stocks in S&P 500 index, 115 increased, 385 declined and none was unchanged. Of the index stocks, 103 rose more than 3% and 18 fell more than 3%.

Legg Mason Inc led the gainers in the S&P 500 index with a rise of 7.2% followed by gains in American Capital of 6%, in AIG of 5.9%, in General Growth Properties of 5.7%, in Prologis of 5.7% and in Vulcan Materials of 5.1%.

Zions Bancorp led decliners in the S&P 500 index with a plunge of 14.2% followed by losses in Regions Financial of 12.1%, in Consolidated Energy of 9.99%, in Nabors Industry of 9.4%, in National Oilwell Varco of 9.4%, in Dillards Inc of 8.9% and in Air Products & Chemical of 8.8%.

South American Markets Indexes

Brazil led decliners in the region with a loss of 3.78% followed by losses in Argentina of 2.00%, in Colombia of 1.8%, in Peru of 1.71%, in Mexico of 0.65% and in Venezuela and Chile of 0.1%.

Europe Markets Review

In London FTSE 100 Index closed lower 100.10 or 1.91% to 5,136.10, in Paris CAC 40 Index decreased 83.69 or 1.98% to close at 4,139.82 and in Frankfurt DAX index lower 39.22 or 0.64% to close at 6,068.53. In Zurich trading SMI decreased 77.44 or 1.12% to close at 6,809.95.

Of the stocks in DAX 30 index in Germany 20 closed lower and 10 rose. MAN AG fell 4.4% followed by losses in Linde AG of 4.3%, in Volkswagen of 3.7%, in Thyssenkrupp AG of 3.5%. Deutsche Postbank led the gainers in the DAX 30 index with a rise of 3.4% followed by increase in 2% of RWE AG, E.ON AG of 1.3%.

Of the stocks in CAC 40 index, Carrefour SA led the gainers in the index with a rise of 1.6% followed by gains in Lagardere SCA of 0.97% and 0.6% in GDF Suez. STMicroelectronics fell 5% followed by losses of 4.6% in PPR, of 4.4% in Schneider Electric, of 4.3% in LVMH and 4.2% in Accor.

Asian Markets Review

Hang Seng index in Hong Kong decreased 759.35 or 3.87% closed to 18,872.85. CSI 300 index in China lower 84.14 or 3.81% closed to 2,123.48. ASX 200 index in Australia decreased 97.00 or 1.93% to close 4,923.50. The KL Composite index in Malaysia lower 2.44 or 0.24% closed to 1,026.18. Market of Tokyo was closed today.

The Kospi Index in South Korea increased 21.03 or 1.44% to close at 1,481.37, SET index in Thailand closed lower 6.24 or 1.02% to 608.25 and JSE Index in Indonesia decreased 24.24 or 1.28% to 1,873.10. The Sensex index in India decreased 424.65 or 3.03% closed to 13,570.31.

Commodities, Metals, and Currencies

Crude oil decreased $2.38 to close at $106.99 a barrel for a front month contract, natural gas increased 33 cent to $7.98 per mBtu and gasoline futures decreased 10.13 cents to close at 260.25 cents per gallon.

Wheat futures closed up 12.75 cents in Chicago trading and closed at $7.50 a bushel. Sugar decreased 0.32 cent to 13.94 cents a pound. Soybean future closed down 18.00 cents to $11.87 a bushel.

Gold decreased $8.30 in New York trading to close at $900.70 per ounce, silver closed down $0.07 cents to $13.37 per ounce and copper for the front month delivery decreased 10.30 cent to $3.15 per pound.

Dollar edged higher against euro to $1.4674 and dropped against yen to 105.45.

Yields on 10-year U.S. bonds decreased to 3.81% and decreased to 4.39% with 30-year of maturities.