World Markets Fall, U.S. Foreclosures Rise

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

World markets continue their downward spiral. Markets in Asia dropped more than 3% and European markets decline. U.S. homes foreclosures surged at the end of the third quarter by 71%. California, Florida, Arizona, and Nevada led the foreclosures.

[R]10:30AM New York – World financial markets continue their downward spiral as world financial markets await economic clarity in the U.S. economy. U.S. stocks traded lower. U.S. home foreclosures surge.[/R]

World financial markets traded lower as economic uncertainties continue in the U.S.

In the middle of the earnings season, investors are busy understanding the latest quarterly data and looking for signs earnings outlook. The economic climate has turned negative around the world and investors are bracing for indications of losses.

Markets in Japan dropped as much as 7.3% in the morning session all major markets in Asia closed lower. European markets at mid-day declined between 2% and 4%.

Goldman Sachs Group Inc ((GS)) is expected to eliminate 3,200 jobs as financial markets weaken and demand for business advisory services shrink. The job losses were first reported on Bloomberg News and confirmed later by 123jump.com.

Merrill Lynch ((MER)) is expected to layoff between 3,000 and 7,000 people before the end of the year and sources within Citigroup indicate at least 5,000 people layoff before the end of January next year.

The home foreclosures notices surged at the end of the third quarter by 71% according to the latest data released by RealtyTrac. The private research company indicated that 765,558 homeowners received notices, a rise of 3% from the second quarter and 71% from a year ago.

The notices could have been higher but for the recently enacted law in California that helps homeowners to stay longer in their homes.

Foreclosure notices rose sharply in California, Florida, Arizona, Massachusetts, Michigan and Nevada. More than 60% of notices were sent in these states. In all, 210,845 owners are in default in California, 127,300 in Florida and 40,400 in Arizona.

“Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac.

Nevada leads the nation with the highest foreclosure rate in September with 11% increase in foreclosure activity from the previous month to 13,022. An increase of 137% from September 2007 and one in every 82 housing units or more than 5 times the national average.

Earnings Review

Amazon.com, Inc, the online retailer said third quarter sales rose 31% to $4.26 billion from $3.26 billion a year ago. Net income in the quarter rose 48% to $118 million or 27 cents per diluted share compared to net income of $80 million or 19 cents per share, a year ago.

Amazon.com, Inc ((AMZN)) in the last one year traded as high as $101.09 in October 2007 and as low as $43.39 in October 2008. Based on the yesterday’s closing price the company has a market cap of $21.29 billion.

Baker Hughes Incorporated, oil and gas services provider said third quarter sales rose 12% to $3.01 billion from $2.68 billion a year ago. Net income in the quarter rose 10% to $428.9 million or $1.39 per diluted share compared to net income of $389.1 million or $1.22 per share, a year ago.

Baker Hughes Incorporated ((BHI)) in the last one year traded as high as $94.42 in October 2007 and as low as $29.51 in October 2008. Based on the yesterday’s closing price the company has a market cap of $9.35 billion.

Baidu.com, Inc, the leading Chinese language Internet search provider said third quarter sales rose 85.1% to Rmb 919.1 million from Rmb 496.5 million a year ago. Net income in the quarter rose 91.4% to Rmb 347.9 million or Rmb 10.00 per diluted share compared to net income of Rmb 181.7 million or Rmb 5.23 per share, a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 213.71 or 2.46% to 8,460.98, Hang Seng index in Hong Kong decreased 506.11 or 3.55% closed to 13,760.49. CSI 300 index in China higher 1.46 or 0.08% closed to 1,834.78. ASX 200 index in Australia decreased 181.70 or 4.37% to close 3,974.40. The KL Composite index in Malaysia lower 12.96 or 1.43% closed to 891.32.

The Kospi Index in South Korea decreased 84.88 or 7.48% to close at 1,049.71. JSE Index in Indonesia decreased 42.54 or 3.08% to 1,337.20. The Sensex index in India decreased 398.20 or 3.92% closed to 9,771.70. Markets in Thailand were closed today.

Europe Markets Review

In London FTSE 100 Index traded lower 87.91 or 2.18% to 3,952.98, in Paris CAC 40 Index decreased 101.64 or 3.08% to 3,196.54 and in Frankfurt DAX index traded lower 188.51 or 4.12% to 4,382.56. In Zurich trading SMI decreased 68.18 or 1.15% to 5,857.28.