U.S. Stocks Down, Libor Falls

123jump.com Staff
05 Nov, 2008
New York City

U.S. stocks edge lower after the historic Presidential election. The president-elect Barack Obama is likely to increase infrastructure spending and accelerate the pullout of the U.S. troops from Iraq. The Libor rate dropped, but still hovers above the Fed rates. Japan and China closed up.

[R]9:30 a.m. New York – U.S. stocks drop after Election Day rally. European markets decline on weak earnings. The Libor drop still hovers at a premium to the U.S. Fed rates. Japan surged.[/R]

U.S. stocks opened lower after rallying on the Presidential Election Day. Democratic Party candidate Barack Obama was elected by a landslide in an historic election that saw a sharp increase in young voters’ participation. President-elect Obama fought the election on the platform of “change” and “yes we can” and will accelerate the pull out of U.S. army from Iraq and focus on Afghanistan.

Douglas Emmett Inc, a real estate company said third quarter revenues rose 15.7% to $153.2 million from $132.5 million a year ago. Net loss in the quarter was $9.7 million or 8 cents per diluted share compared to net loss of $2.8 million or 3 cents per share, a year ago.

Weight Watchers International, Inc, a provider of weight management services said third quarter revenues rose 5% to $352.6 million from $337.5 million a year ago. Net income in the quarter rose 6% to $52.7 million or 67 cents per diluted share compared to net income of $49.5 million or 62 cents per share, a year ago.

Sprint Nextel Corp received the Federal Communications Commission approval to merge its high speed wireless segment with Clearwire Corp. The merger approval will help Sprint to build first nationwide WiMax network and lower the cost of wireless internet access.

European markets declined nearly 2% at mid-day and interbank lending rate fell but not as much as the rate cut by the Fed. Banks are still not willing to lend to each other.

The Libor, London Interbank Offered Rate, for 3-month dollar deposit dropped 20 basis points to 2.51% but still above the Fed rate of 1%. The rate had surged as high as 4.82% immediately after the collapse of Lehman Brothers and only in the last three days has been on the decline.

The largest French bank BNP Paribas reported third quarter profit decline of 56% to 901 million euros or $1.2 billion after the bank sharply increased loan losses in the mortgage portfolio. BNP Paribas fell 2.3 euros or 4% to 56.24 euros.

Carlsberg A/S, the beer brewing company reported third quarter net income of 1.22 billion kroner or $210 million and lowered its annual earnings outlook. Carlesberg dropped 8.4% or Dkk 21.50 to Dkk 235.50.

Swisscom AG, the largest Swiss telecom company reported third quarter revenue rise of 3.5% to Sfr 3.09 billion and net income dropped 32% to Sfr 473 million from Sfr 691 million. The company said that is not likely to meet its annual revenue forecast because of the recent rise in Swiss franc against euro and other currencies. Swisscom purchased Italy based FastWeb and third quarter earnings rose on one-time gain of Sfr 157 million on the sale of Hungarian subsidiary.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 406.64 or 4.46% to 9,521.24, Hang Seng index in Hong Kong increased 455.82 or 3.17% closed to 14,840.16 CSI 300 index in China higher 63.66 or 3.91% closed to 1,691.42. ASX 200 index in Australia increased 121.50 or 2.88% to close 4,336.60. The KL Composite index in Malaysia higher 9.66 or 1.07% closed to 915.24.

The Kospi Index in South Korea increased 28.15 or 2.44% to close at 1,181.50. SET index in Thailand closed lower 0.26 or 0.06% to 457.36 and JSE Index in Indonesia decreased 3.51 or 0.26% to 1,366.28. The Sensex index in India decreased 511.11 or 4.81% closed to 10,120.01.

Europe Markets Review

In London FTSE 100 Index traded lower 90.50 or 1.95% to 4,549.00, in Paris CAC 40 Index decreased 87.76 or 2.38% to 3,603.33 and in Frankfurt DAX index traded lower 68.60 or 1.30% to 5,209.44. In Zurich trading SMI decreased 123.23 or 1.93% to 6,276.75.