Libor Record Rates, U.S. Stocks Weak

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

Stock in New York reversed the earlier gains and fell 1%. IBM reported better than expected earnings and guided 22% rise in the current fiscal year earnings. Interbank lending remains tight and rate hovered bear 5%, despite global rate cut.

[R]11:15AM New York – U.S. stocks reversed their morning gains as interbank lending rates remained tight.[/R]

Interbank lending remains tight despite additional measures by central banks around the world. The dollar denominated Libor lending rate in London hovered near 5%, significantly higher than 1.5% rate on U.S. Treasury. The rates surged to 5.09% but despite the global interest rates cuts announced by central banks rate in the morning remained above 4.75%.

The better than expected earnings from IBM lifted tech stocks and broader market at the opening. The Asian markets stabilized after central banks in seven counties acted together to lower rates ahead of a meeting of G7 nations this week.

IBM released its preliminary earnings and showed a rise in earnings and revenues. Revenues in the third quarter increased 5% to $25.3 billion and net income gained 20% to $2.8 billion from a year ago. The earnings per share from continuing operations increased 22% to $2.05 from $1.68 a share in the prior year period.

The technology giant reaffirmed earnings for the year of at least $8.75 a share, an increase of 22% from a year ago.

Emerging markets traded mostly lower in the trading today. Stock markets in Indonesia remained halted for the second day but Russian markets reopened in the afternoon trading. The Micex Index surged 11.3%. Brazil, Peru and Chile closed between 3% and 5% on Wednesday and rebounded in the early morning trading. But, Asian markets mostly weak.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 45.83 or 0.50% to 9,157.49, Hang Seng index in Hong Kong increased 511.51 or 3.31% closed to 15,943.24. CSI 300 index in China lower 27.58 or 1.36% closed to 1,955.30. ASX 200 index in Australia decreased 67.20 or 1.53% to close 4,320.90. The KL Composite index in Malaysia lower 1.30 or 0.13% closed to 968.89.

The Kospi Index in South Korea increased 8.20 or 0.64% to close at 1,294.89 and SET index in Thailand closed higher 7.65 or 1.55% to 499.99. Market of Indonesia and India were closed today.

Europe Markets Review

In London FTSE 100 Index traded higher 47.60 or 1.09% to 4,414.30, in Paris CAC 40 Index increased 70.98 or 2.03% to 3,567.87 and in Frankfurt DAX index traded higher 7.51 or 0.15% to 5,021.13. In Zurich trading SMI decreased 18.55 or 0.31% to 6,054.90.