S&P Down 5.2%, Paulson Wavers

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

U.S. stocks dropped more than 5% after the U.S. Treasury Secretary switched his bailout plan focus one more time. The frequent changes in emphasis left the market confused and raises doubts that the Bush administration is out of touch. Of the S&P 500 index stocks, 71 fell more than 10%.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– U.S. stocks dropped more than 5% after the U.S. Treasury Secretary switched his bailout plan focus one more time. The frequent change in emphasis left the market confused and raises doubts that the Bush administration is out of touch. Of the S&P 500 index stocks, 71 fell more than 10%.[/R]

Global Markets

U.S. stocks fell sharply after the Treasury Secretary changed his mind again and decided to offer loans to troubled consumer financing companies. The frequent change of focus only raises the fears that Bush administration still does not have a grasp of the quickly deteriorating situation. Retailers forecasted weak results and Best Buy, the electronics retailer forecasted one of the worst holiday shopping seasons in the last two decades.

Steelmakers fell as global economic slowdown forces companies to cut production. ArcelorMittal dropped 10% and AK Steel declined 12%. Best Buy offered weak outlook for the holiday season. CB Richard Ellis dropped 14% on the worries that public offering will dilute shareholders.

The U.S. department retail chain Macy’s revenues declined 7% to $5.5 billion and swung to a loss of $44 million or 10 cents a share compared to net income of $33 million or 8 cents a share. Thomson Reuters revenue rose 8% to $3.3 billion and net income of $380 million or 46 cents a share.

The UK unemployment rate jumped to 5.8% in the third quarter to September. The BoE lowered its inflation forecast for the second half. Sainsbury lifted its dividend on higher quarterly profit. Thomson Reuters revenue rose but net fell.

The Nikkei 225 index in Japan dropped below its underlying book value as domestic investors sell stocks. Consumer confidence in Japan dropped to the lowest level since 1982 in October. Inpex lowered its revenue and earnings outlook for the year. Softbank led the gainers after Alibaba.com earnings rise.

The Producers Price Index in China rises to 6.6% in October and CPI increased to 4%. Alibaba.com reported higher than expected earnings lifting the stocks 10%. Third quarter net rose 49%. Stocks in Hong Kong fell 0.7% and in Shanghai declined 1.2%. Li & Fung surges 11% on an outsourcing order.

India’s Industrial production rises 4.8% in September. Stocks fall on political uncertainty as state wide polls draw near. Tata Teleservices sell 26% stake for $2.7 billion to NTT DoCoMo of Japan. Software exporters rose after the rupee declined to 48.84 to a dollar.

Stocks in Australia dropped despite a rise in consumer sentiment. UBS lowered net income estimate by 9% for Rio Tinto after the mining giant lowered production target by 10%. Fortescue Metals lowered iron ore shipment estimate on a fall in demand plant shut downs.

North American Markets

Dow Jones Industrial Average dropped 411.14 or 4.7% to a close of 8,282.82, S&P 500 Index closed down 46.64 or 5.2% to 852.31, and Nasdaq Composite Index decreased 81.69 or 5.2% to close at 1,499.21. In Toronto, TSX Composite Index fell 518.39 or 5.5% to 8,905.61.

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

Citigroup Inc led the decliners in the index with a fall of 11.3% followed by decreases in American Express of 10.8%, in General Electric of 9.3%, in Bank of America of 8.9%, in Chevron Corp of 8.5% and in Walt Disney of 7.9%.

General Motors was the only gainer in the Dow with a rise of 6%.

Of the stocks in S&P 500 index, 11 increased, 486 decreased and 2 were unchanged. Of the index stocks, 1 rose more than 3% and 402 fell more than 3% and 71 dropped more than 10%.

Prologis led decliners in the S&P 500 index with a plunge of 33.6% followed by losses in Sprint Nextel Company of 28.5%, in General Growth Properties of 27%, in JDS Uniphase of 24%, in AK Steel Holding of 23.5% and in Genworth Financial of 21.7%.

General Motors led the gainers in the S&P 500 index with a rise of 4.8% followed by gains in Fiserv Inc of 2.6%, in Ford Motor Company of 2.2%, in Archer Daniels Midland of 1.9%, in AES Corp of 1.7% and in Gilead Sciences of 0.7%.

South American Markets Indexes

Brazil led decliners in the region with a fall of 7.8% followed by declines in Argentina of 5.5%, in Mexico of 4.2%, in Chile of 3.5% and in Peru of 3.3%.

Venezuela gained 1.6%.

Europe Markets Review

In London FTSE 100 Index closed lower 64.67 or 1.52% to 4,182.02, in Paris CAC 40 Index decreased 102.45 or 3.07% to close at 3,233.96 and in Frankfurt DAX index lower 140.78 or 2.96% to close at 4,620.80. In Zurich trading SMI decreased 177.93 or 3.03% to close at 5,702.86.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 113.79 or 1.29% to 8,695.51, Hang Seng index in Hong Kong decreased 101.81 or 0.73% closed to 13,939.09 CSI 300 index in China higher 20.46 or 1.15% closed to 1,801.82. ASX 200 index in Australia decreased 33.60 or 0.85% to close 3,927.30. The KL Composite index in Malaysia lower 4.26 or 0.48% closed to 890.34.

The Kospi Index in South Korea decreased 4.87 or 0.43% to close at 1,123.86. SET index in Thailand closed lower 6.61 or 1.49% to 435.70 and JSE Index in Indonesia decreased 9.94 or 0.74% to 1,326.62. The Sensex index in India decreased 303.36 or 3.08% closed to 9,536.33.

Commodities, Metals, and Currencies

Crude oil decreased $3.52 to close at $55.81 a barrel for a front month contract, natural gas decreased 32 cent to $6.38 per mBtu and gasoline futures decreased 6.69 cents to close at 123.90 cents per gallon.

Wheat futures closed up 9.75 cents in Chicago trading and closed at $5.33 a bushel. Sugar decreased 0.19 cent to 11.61 cents a pound. Soybean future closed down 21 cents to $8.95 a bushel.

Gold decreased $22.20 in New York trading to close at $710.60 per ounce, silver closed down 51 cents to $9.30 per ounce and copper for the front month delivery decreased 7.20 cent to $1.5760 per pound.

Dollar edged higher against euro to $1.2483 and fell against yen to 94.94.

Bonds markets were closed. Yields on 10-year U.S. bonds decreased to 3.65% and with 30-year maturities decreased to 4.17%.