U.S. Stocks Drop, Europe Markets Plunge 6%

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

The global markets continue to reel under the widening banking crisis and weak confidence in the investor community. Stocks in New York, Europe and Asia continue to drift lower. The central bankers in the U.S., Europe, china other countries lower rate to improve liquidity.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– The U.S. stocks dropped in the last one hour despite a coordinated action by central banks in six countries to lower key lending rates. The UK Treasury with the BoE offered to inject £50 billion in the UK banking system.[/R]

Global Markets

The Fed in a coordinated move with five other central banks lowered its key lending rate. The move comes after the Fed became the lender in the commercial paper market and offering nearly $900 billion in short term lending and expanding several times lending facility this year.

Asian and emerging markets plunge. Japan dropped the most since 1987. Indonesia halted after 10% fall. Russia drops 11% and closed exchanges till Oct 10. India with 3% loss is down 50% for the year. Hong Kong plunges 8.2% and cut rates. Australia declines 5%.

Stewart Enterprises plunges 25% after the rival Service Corp withdrew the offer. Merrill Lynch falls on the worries that current quarter loss will be wider than expected. Bank of America drops on $10 billion capital raising plan. MetLife plans secondary offering.

UK offered up to £50 billion of investments in eight largest bank in exchange of preference shares and £200 billion of loan package. The sweeping move will help banks to recapitalize in a near nationalization of banking sector. The BoE lowered the rate by 0.5% along with the Fed, ECB and others.

Japan stocks plunged in a record one-day loss since 1987. Rising bankruptcies, worries related to banking sector health and falling profits from automakers dragged markets lower. Toyota dived 11% after media reports suggested 40% fall in profit for the current year.

Rupee in Mumbai trading fell near five-year low and is likely to trade below record set in June of 2002. Rising trade and current account deficit and lack of interest from foreign investors has battered stocks and rupee. Sensex index dropped 3% and has lost nearly 50% from the peak in January.

North American Markets

Dow Jones Industrial Average fell 189.01 or 2.00% to a close of 9,258.10, S&P 500 Index closed down 11.29 or 1.13% to 984.94, and Nasdaq Composite Index down 14.55 or 0.83% to close at 1,740.33. In Toronto TSX Composite closed up 226.76 or 2.31% to 10,056.31.

Of the 30 stocks in Dow Jones Industrial Average 6 closed higher and 24 closed lower.

Alcoa Inc led decliners in the index with a fall of 11.97% followed by losses in General Motors of 8.60%, in Bank of America of 7%, in IBM of 5.3%, in Citigroup Inc of 4.95% and in 3M Company of 4.3%.

General Electric led the gainers in the Dow Jones Industrial Average with a gain of 1.7% followed by gains in Intel Corp of 1.44%, in Exxon Mobil Corp of 1.22%, in Hewlett Packard of 0.81% and in Caterpillar Inc of 0.68%.

Of the stocks in S&P 500 index, 180 increased, 318 declined and 2 was unchanged. Of the index stocks, 63 rose more than 3% and 140 fell more than 3%. And 15 stocks plunged more than 10%.

General Growth Properties led gainers in the S&P 500 index with a rise of 20% followed by gains in Newmont Mining of 14.8%, in Titanium Metals of 14.8%, in Dynegy Inc of 13.3%, in Flowserve Corp of 12.1%, in CF Industries of 11.5%, in CB Richard Ellis of 11.3% and in Consol Energy of 11.3%.

XL Capital Ltd led the decliners in the S&P 500 index with a plunge of 27.7% followed by losses in MetLife Inc of 26.7%, in Allstate Corp of 21.2%, in Principal Financial of 19.8%, in Office Depot Inc of 18.8% and in Loews Corp of 17.5%.

South American Markets Indexes

Chile led decliners in the region with a fall of 4.5% followed by decrease in Peru of 4.2% in Brazil of 3.9%, in Colombia of 3.23%, in Venezuela of 2.41%, in Argentina of 1.8% and in Mexico of 0.99%.

Europe Markets Review

In London FTSE 100 Index closed lower 238.50 or 5.18% to 4,366.70, in Paris CAC 40 Index decreased 235.33 or 6.31% to close at 3,496.89 and in Frankfurt DAX index lower 313.01 or 5.88% to close at 5,013.62. In Zurich trading SMI decreased 354.31 or 5.51% to close at 6,073.45.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 952.58 or 9.38% to 9,203.32, Hang Seng index in Hong Kong decreased 1372.03 or 8.17% closed to 15,431.73. CSI 300 index in China lower 79.57 or 3.78% closed to 2,022.88. ASX 200 index in Australia decreased 230.60 or 4.99% to close 4,388.10. The KL Composite index in Malaysia lower 27.04 or 2.71% closed to 970.19.

The Kospi Index in South Korea decreased 79.41 or 5.81% to close at 1,286.69, SET index in Thailand closed lower 36.37 or 6.88% to 492.34, and JSE Index in Indonesia decreased 168.05 or 10.38% to 1,451.67. The Sensex index in India decreased 366.88 or 3.14% closed to 11,328.36.

Commodities, Metals, and Currencies

Crude oil decreased $0.75 to close at $88.20 a barrel for a front month contract, natural gas increased 6 cent to $6.80 per mBtu and gasoline futures decreased 0.98 cents to close at 202.00 cents per gallon.

Wheat futures closed up 8 cents in Chicago trading and closed at $6.16 a bushel. Sugar decreased 0.14 cent to 11.89 cents a pound. Soybean future closed up 7 cents to $9.71 a bushel.

Gold increased $3.40 in New York trading to close at $909.90 per ounce, silver closed up $0.08 cents to $11.85 per ounce and copper for the front month delivery increased 2.750 cent to $2.3825 per pound.

Dollar edged lower against euro to $1.3586 and lost against yen to 99.88.

Yields on 10-year U.S. bonds increased to 3.50% and with 30-year maturities increased to 4.03%.