Weak U.S. Insurance Stocks, Global Indexes

123jump.com Staff
01 Oct, 2008
New York City

Stocks in New York traded sideways ahead of the U.S. Senate vote on the proposed bailout plan. Stocks of insurance companies declined sharply as earnings worries take hold. Principal Financial, Hatford Financial, MetLife and Prudential plunged more than 5%. GE plans to raise $12 billion.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– U.S. stocks traded sideways ahead of the Senate vote on the proposed bailout plan. GE plans to raise $12 billion and agreed to sell $3 billion of preferred stock to Warren Buffett.[/R]

Global Markets

U.S. stocks traded lower after General Electric rating was lowered on weak earnings outlook in its financial services. GE dropped more than 7% and dragged market indexes lower with it. MetLife, Prudential and Hartford Life plunged on the earnings worries. Peabody Energy and Freeport McMoran drop 10%.

Berkshire Hathaway agreed to invest $3 billion in General Electric. GE will raise $12 billion in capital to shore its financial strength. Warren Buffett controlled company will receive preferred stock that pays 10% dividend and are callable at a 10% premium after three years and will also receive warrants with a strike price of $22.25 a share which will expire in five years.

General Electric declined $1.00 to $24.50 at the close of regular trading.

Farmers Mac surges 60% after it raised $65 million to meet its regulatory capital requirements and replaced its chief executive. Peabody Energy and Massey Energy plunge more than 10% as oil price decline and economic worries rise. Hartford Financial plunges more than 10% for the second day.

Manufacturing index suggested that the UK manufacturing has declined and service industry has lost its growth drive as consumer spent less and business face tighter lending. Xstrata Plc abandoned its hostile bid for Lonmin Plc and raised its stake to 25% in the company. Pound fell.

Sensex in Mumbai trading gained on hopes that the U.S. will pass its bailout plan. Trade deficit for the first five months surged 44% on crude oil import bill rise of 77%. The sharp rise in oil prices lifted the trade deficit to $49 billion in the period. Software exporters gained on weak rupee.

Japan stocks closed marginally higher ahead of the U.S. Senate vote but business sentiment continues to weaken. Wages in August fell 0.3% and auto sales for the first six months of the fiscal year declined 3%. Shipping lines fell as freight index drops.

North American Markets

Dow Jones Industrial Average fell 19.59 or 0.2% to a close of 10,831.07, S&P 500 Index closed down 22.48 or 1.07% to 2,069.40, and Nasdaq Composite Index down 5.30 or 0.45% to close at 1,161.06. In Toronto TSX Composite closed down 38.39 or 0.33% to 11,714.51.

Of the 30 stocks in Dow Jones Industrial Average 15 closed higher and 15 closed lower.

Citigroup led gainers in the index with a rise of 12.4% followed by gains in Bank of America of 8.8%, in JP Morgan Chase of 7%, in McDonalds Corp of 3.4%, in Pfizer Inc of 2.8% and in Coca-Cola of 2.8%.

Alcoa Inc led decliners in the Dow Jones Industrial Average with a loss of 6.2% followed by losses in IBM of 5.7%, in General Electric of 4.6%, in Caterpillar Inc of 4.4% and in Hewlett Packard of 3%.

Of the stocks in S&P 500 index, 183 increased, 314 declined and 2 were unchanged. Of the index stocks, 57 rose more than 3% and 117 fell more than 3%. And 6 stocks plunged more than 10%.

National City Corp led gainers in the S&P 500 index with a rise of 72% followed by gains in Sovereign Bancorp of 24.3%, in First Horizon of 22%, in Huntington Bancorp of 21.8%, in MGIC Investment of 18.4%, in AIG of 18.3%, in Fifth Third Bancorp of 17.6% and in KeyCorp of 17%.

SLM Corp led the decliners in the S&P 500 index with a loss of 31% followed by losses in Genworth Financial of 14.6%, in Principal Financial of 13.8%, in Ford Motor Company of 13%, in MetLife Inc of 11% and in Prudential Financial of 10.5%.

South American Markets Indexes

Mexico led gainers in the region with a rise of 0.9% followed by increase in Chile of 0.83%, in Brazil of 0.5%, in Argentina of 0.4% and in Peru of 0.34%.

Venezuela traded down 0.09%.

Europe Markets Review

In London FTSE 100 Index closed higher 57.10 or 1.16% to 4,959.60, in Paris CAC 40 Index increased 22.44 or 0.56% to close at 4,054.54 and in Frankfurt DAX index lower 24.69 or 0.42% to close at 5,806.33. In Zurich trading SMI increased 72.74 or 1.09% to close at 6,727.63.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 108.40 or 0.96% to 11,368.26. ASX 200 index in Australia increased 194.10 or 4.22% to close 4,794.60. Markets of Hong Kong, Shanghai and Malaysia were closed today.

The Kospi Index in South Korea decreased 8.39 or 0.58% to close at 1,439.67 and SET index in Thailand closed lower 2.09 or 0.35% to 594.45. The Sensex index in India increased 195.24 or 1.52% closed to 13,055.67. Market of Indonesia was closed today.

Commodities, Metals, and Currencies

Crude oil decreased $1.90 to close at $98.74 a barrel for a front month contract, natural gas increased 34 cent to $7.78 per mBtu and gasoline futures decreased 9.03 cents to close at 236.74 cents per gallon.

Wheat futures closed down 10.25 cents in Chicago trading and closed at $6.6975 a bushel. Sugar increased 0.27 cent to 13.97 cents a pound. Soybean future closed up 8 cents to $10.53 a bushel.

Gold decreased $1.00 in New York trading to close at $879.80 per ounce, silver closed up $0.29 cents to $12.56 per ounce and copper for the front month delivery decreased 10.55 cent to $2.77 per pound.

Dollar edged higher against euro to $1.4016 and gained against yen to 106.03.

Yields on 10-year U.S. bonds decreased to 3.73% and decreased to 4.21% with 30-year of maturities.