World Markers Decline, Retailers Drop

123jump.com Staff
01 Dec, 2008
New York City

U.S. stocks fell as much as 4% in the morning trading. Holiday sales kicked off strong but after heavy merchandising discount by retailers. Most retailers are likely to face a sharp decline in earnings. Asian markets closed lower and European markets declined. Crude oil fell 5%.

[R]10:30 AM New York – U.S. stocks fell sharply after markets in Asia closed lower and European markets declined.[/R]

Benchmark indexes in New York opened sharply lower on the worries that global economic slump is likely to be deeper and longer than what lawmakers and central bankers are estimating.

The holiday sales that began over the weekend in the U.S. were stronger than expected but the consumers focused on discounted items and avoided other purchases.

Dow Jones Industrial Average dropped 367.89 to 8,461.41 and Nasdaq declined 69.59 to 1,467.22.

Retailers fell on worries that larger and earlier than normal discount during holiday period will affect earnings. Wal-Mart ((WMT)) declined $1.38 to $54.48, J C Penney ((JCP)) fell $1.10 to $17.89, Macy’s ((M)) dropped 65 cents to $6.77 and Nordstrom Inc ((JWN)) declined 45 cents to $10.92.

Crude oil futures in New York fell 6.5% or $3.51 to $50.92 a barrel and natural gas declined 6 cents to $6.45 per mBTU. Gold futures declined 4.3% or $35.70 $783.30 and copper fell 1.3% or 2.20 cents to $1.62 a pound.

OPEC in the latest meeting deferred the production cut to the next meeting on December 17. The Organization for Petroleum Exporting Countries meeting focused on the impact of the latest production cut of 1.5 million barrel approved in October. The OPEC oil ministers are looking for crude oil price to stabilize at $75 a barrel and worry alternative energy initiatives will lower oil demand in the long term.

Stocks in Asia closed lower and in Europe in the early afternoon were down between 2% and 3%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 115.05 or 1.35% to 8,397.22, Hang Seng index in Hong Kong increased 220.60 or 1.59% closed to 14,108.84 CSI 300 index in China higher 34.28 or 1.87% closed to 1,864.20. ASX 200 index in Australia decreased 61.30 or 1.64% to close 3,681.20. The KL Composite index in Malaysia lower 17.71 or 2.04% closed to 848.43.

The Kospi Index in South Korea decreased 17.45 or 1.62% to close at 1,058.62. SET index in Thailand closed lower 10.92 or 2.72% to 390.92 and JSE Index in Indonesia decreased 18.42 or 1.48% to 1,223.12. The Sensex index in India decreased 252.85 or 2.78% closed to 8,839.87.

Europe Markets Review

In London FTSE 100 Index traded lower 106.38 or 2.48% to 4,181.63, in Paris CAC 40 Index decreased 89.93 or 2.76% to 3,172.75 and in Frankfurt DAX index traded lower 144.91 or 3.10% to 4,524.53. In Zurich trading SMI decreased 154.73 or 2.66% to 5,661.87.