Dow Down 2%, World Markets Decline

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

Global stocks declined on the worries that recession in the U.S. may be deeper and longer than previously anticipated. Market indexes in the U.S. dropped more than 2% and in Europe fell between 4% and 6%. Russia plunged 10%. Copper declined 5% and crude oil fell 4%.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– Global stocks declined on the worries that recession in the U.S. may be deeper and longer than previously anticipated. Market indexes in the U.S. dropped more than 2% and in Europe fell between 4% and 6%. Russia plunged 10%. Copper declined 5% and crude oil fell 4%.[/R]

Global Markets

U.S. market indexes faltered after a decline in home builders, insurers, retailers and real estate investment trusts. Starbucks reported a sharp decline in earnings, Tyco issued a cautious outlook. Insurance companies fell on the need for more capital.

Insurance companies fell on the mounting worries that leading companies in the sector will need additional capital to support their ratings. Hartford and Prudential led the decliners. CB Richard Ellis plunged after it announced a plan to raise capital in public offering.

Starbucks Corp fourth quarter revenue rose 3% to $2.5 billion and net income fell 97% to $5.4 million. Comparable domestic location sales fell 5% and across the system fell 3%. The company guided 2% decline same stores sales decline in fiscal 2009.

European markets fell more than 4% on the weak profit outlook. Mining and metals companies declined after crude oil and metals prices fell. Banks and insurance companies fell after weak earnings from Intesa Saopaolo SpA. Vodafone Group rose on 17% rise in sales. Russia plunged 11%.

Stocks in Australia fell sharply after the business confidence index dropped to the lowest level in two decades. Mounting recession worries and a drop in metals prices led the resource stocks lower. Banks fell on the worries that transportation company Asciano Group may need more capital.

North American Markets

Dow Jones Industrial Average dropped 176.58 or 2% to a close of 8,693.96, S&P 500 Index closed down 20.26 or 2.2% to 898.95, and Nasdaq Composite Index decreased 35.84 or 2.2% to close at 1,580.90. In Toronto, TSX Composite Index fell 264.80 or 2.73% to 9,424.00.

Of the 30 stocks in Dow Jones Industrial Average 1 closed higher and 29 closed lower.

General Motors led the decliners in the index with a fall of 13% followed by decreases in Alcoa Inc of 7.2%, in American Express of 6.6%, in Boeing company of 4.7%, in Du Pont of 4.5% and in Bank of America of 4.1%.

Pfizer was the only gainer in the Dow with a rise of 1%.

Of the stocks in S&P 500 index, 65 increased, 433 decreased and one was unchanged. Of the index stocks, 9 rose more than 3% and 233 fell more than 3% and 21 dropped more than 10%.

General Growth Properties led decliners in the S&P 500 index with a plunge of 64% followed by losses in Genworth Financial of 54.4%, in Tyson Foods of 23%, in CB Richard Ellis of 23%, in Hartford Financial of 22.75% and in Sprint Nextel of 21.7%.

Legg Mason Inc led the gainers in the S&P 500 index with a rise of 7.3% followed by gains in Apartment Investment of 5.8%, in Mylan Inc of 5.8%, in Goldman Sachs of 4.9%, Rockwell Automation of 4.3%, in Exelon Corp of 3.96%, in NYSE Euronext of 3.7% and in Travelers Inc of 3.5%.

South American Markets Indexes

Peru led decliners in the region with a fall of 3.7% followed by decrease in Chile of 1.8%, in Argentina of 1.75% and in Mexico of 1.1%. Venezuela dropped 0.4%.

Brazil the only gainer in the region closed up 1.3%.

In Caribbean trading JSE Market Index in Kingston, Jamaica dropped 4% to 89,223 today. The index has declined 22% from the peak on February 20 of 114,356. Jamaican dollar has been also under attack on the worries that the lower tourism receipt and falling remittances from the US and Canada will affect current account balance in the country.

Europe Markets Review

In London FTSE 100 Index closed lower 157.23 or 3.57% to 4,246.69, in Paris CAC 40 Index decreased 169.34 or 4.83% to close at 3,336.41 and in Frankfurt DAX index lower 263.95 or 5.25% to close at 4,761.58. In Zurich trading SMI decreased 209.83 or 3.45% to close at 5,880.79.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 272.13 or 3.00% to 8,809.30, Hang Seng index in Hong Kong decreased 703.73 or 4.77% closed to 14,040.90 CSI 300 index in China lower 20.30 or 1.13% closed to 1,781.36. ASX 200 index in Australia decreased 146.90 or 3.58% to close 3,960.90. The KL Composite index in Malaysia lower 9.64 or 1.07% closed to 894.60.

The Kospi Index in South Korea decreased 23.73 or 2.06% to close at 1,128.73. SET index in Thailand closed lower 14.13 or 3.10% to 442.31 and JSE Index in Indonesia decreased 4.12 or 0.31% to 1,336.56. The Sensex index in India decreased 696.47 or 6.61% closed to 9,839.69.

Commodities, Metals, and Currencies

Crude oil decreased $3.52 to close at $58.89 a barrel for a front month contract, natural gas increased 49 cent to $6.76 per mBtu and gasoline futures decreased 7.49 cents to close at 129.25 cents per gallon.

Wheat futures closed up 3.25 cents in Chicago trading and closed at $5.23 a bushel. Sugar decreased 0.20 cent to 11.81 cents a pound. Soybean future closed down 32 cents to $9.16 a bushel.

Gold decreased $14.60 in New York trading to close at $731.90 per ounce, silver closed down 47 cents to $9.75 per ounce and copper for the front month delivery decreased 9.30 cent to $1.6590 per pound.

Dollar edged higher against euro to $1.2510 and fell against yen to 97.66.

Bonds markets were closed. Yields on 10-year U.S. bonds decreased to 3.74% and with 30-year maturities decreased to 4.19%.