U.S. Earnings Worries; Europe Rally on Bailout

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

U.S. stocks declined after weaker than earnings from PepsiCo unnerved investors. Analysts lowered their outlook for the tech sectors but after the close Intel reported better than exepcted third quarter earnings. Metals and mining companies fell. Financials gained on $250 billion Treasury action.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– Stocks in New York fell on earnings worries. European market rose on the back of nearly $1.6 trillion in bank rescue plan. Asian markets closed up on the hopes that exports from the region will sustain.[/R]

Global Markets

U.S. Treasury pressured nine large banks to accept $250 billion in exchange of stakes that will limit executive pay and sustain lending to homeowners and small business. The Treasury action is in sharp contrast to the promise of investing in battered securities owned by banks.

Financial stocks gained in New York in volatile trading after the U.S. Treasury injected $250 billion in nine largest financial institutions. XL Capital rebounded a day after the chairman was forced to meet margin call. Johnson & Johnson rose on 30% rise in earnings. Pepsi fell on 9% drop in third quarter earnings.

North American Markets

Dow Jones Industrial Average dropped 76.62 or 0.8% to a close of 9,310.99, S&P 500 Index closed down 5.34 or 0.5% to 998.01, and Nasdaq Composite Index declined 65.24 or 3.54% to close at 1,779.01. In Toronto TSX Composite Index rose 9.8% or 890.50 to 9,955.66.

Of the 30 stocks in Dow Jones Industrial Average 10 closed higher and 20 closed lower.

Citigroup led gainers in the index with a rise of 18.2% followed by increases in Bank of America of 16.4%, in American Express of 3.2%, in Pfizer Corp of 2.7% and in AT&T of 2.4%.

Coca-Cola Company led decliners in the Dow Jones Industrial Average with a fall of 7.5% followed by losses in Intel Corp of 6.3%, in Alcoa Inc of 6%, in Microsoft Corp of 5.5%, in Boeing Company of 4.3% and Caterpillar of 4%.

Of the stocks in S&P 500 index, 174 increased, 323 declined and 3 were unchanged. Of the index stocks, 84 rose more than 3% and 181 fell more than 3%. And 31 stocks surged more than 10% and 14 dropped more than 10%.

Dynegy Inc led the decliners in the S&P 500 index with a fall of 18.9% followed by losses in Massey Energy of 13.6%, in Nucor Corp of 12.9%, in Prologis Corp of 12.8%, in PepsiCo Inc of 11.9% and in CB Richard Ellis of 11.4%.

XL Capital Ltd led the gainers in the S&P 500 index with a surge of 55% followed by gains in KeyCorp of 54%, in Huntington Banc of 50%, in SLM Corp of 35%, in National City Corp of 35%, in Hartford Financial Services of 34% and in Regions Financial of 28%.

South American Markets Indexes

Argentina led gainers in the region with a rise of 11% followed by increase in Colombia of 9% in Peru of 5.5%, in Chile of 3.2%, in Brazil of 1.8%, in Venezuela of 0.8% and in Mexico of 0.7%.

Europe Markets Review

In London FTSE 100 Index closed higher 137.31 or 3.23% to 4,394.21, in Paris CAC 40 Index increased 97.02 or 2.75% to close at 3,628.52 and in Frankfurt DAX index higher 136.74 or 2.70% to close at 5,199.19. In Zurich trading SMI increased 303.90 or 5.10% to close at 6,260.22.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 1,171.14 or 14.15% to 9,447.57, Hang Seng index in Hong Kong increased 520.72 or 3.19% closed to 16,832.88. CSI 300 index in China higher 50.87 or 2.56% closed to 1,934.62. ASX 200 index in Australia increased 154.50 or 3.70% to close 4,335.20. The KL Composite index in Malaysia higher 15.30 or 1.61% closed to 966.06.

The Kospi Index in South Korea increased 79.16 or 6.14% to close at 1,367.69. SET index in Thailand closed higher 24.44 or 5.13% to 500.77, and JSE Index in Indonesia increased 94.09 or 6.44% to 1,555.97. The Sensex index in India increased 174.31 or 1.54% closed to 11,483.40.

Commodities, Metals, and Currencies

Crude oil decreased $1.92 to close at $79.27 a barrel for a front month contract, natural gas increased 7 cent to $6.76 per mBtu and gasoline futures decreased 3.01 cents to close at 188.75 cents per gallon.

Wheat futures closed down 15.50 cents in Chicago trading and closed at $5.73 a bushel. Sugar increased 0.01 cent to 11.71 cents a pound. Soybean future closed up 18 cents to $9.28 a bushel.

Gold decreased $3.00 in New York trading to close at $839.50 per ounce, silver closed up $0.19 cents to $10.97 per ounce and copper for the front month delivery increased 6.50 cent to $2.37 per pound.

Dollar edged lower against euro to $1.3613 and gained against yen to 102.16.

Yields on 10-year U.S. bonds increased to 4.08% and with 30-year maturities increased to 4.28%.