U.S. Stocks Drop; BoA Job Cuts

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

U.S. international trade deficit widened in October as exports fell more than imports. Seasonally adjusted initial unemployment claims at the end of last week rose 58,000 to 573,000 from the previous week claims of 515,000. Bank of America said it will cut up to 30,000 jobs in the next three years.

4:30PM New York, 10:30PM Frankfurt, 7:30AM Sydney[R]– U.S. stocks fell sharply on the worries that the U.S. Senate may not pass auto bailout plan. U.S. trade deficit in October rose. China’s international trade in November fell. Australian unemployment in November rose.[/R]

Global Markets

U.S. international trade deficit widened in October as exports fell more than imports. Exports in the month totaled $151.7 billion and imports in the month were $208.9 billion with a deficit of $57.2 billion, higher than revised deficit of $56.6 billion in September.

Seasonally adjusted initial unemployment claims at the end of last week rose 58,000 to 573,000 from the previous week claims of 515,000. Bank of America said it will cut up to 30,000 jobs in the next three years.

U.S. stocks fell on the worries that the U.S. Senate may not pass auto bailout plan passed by the House. If the bill is not passed, automakers may have to declare bankruptcies. In trading, market indexes declined on a sharp fall in real estate investment trusts.

Office vacancies in central Tokyo rose as more financial and services companies lay-off people in the district. Separately, stocks edged higher on the optimism that the U.S. will pass $14 billion auto bailout plan and support auto parts makers who also supply to Japanese car companies.

China foreign trade rises in the first eleven months 29% from a year ago but faced a sharp deceleration in November. The latest data showed exports in the month declined 2.2%, first decline since June 2001. Imports declined at a faster pace indicating slowdown in domestic economy.

Australian market averages fell after November unemployment rose to 4.4%. The Canberra Times reported that Qantas was charged with A$20 million on freight price fixing. Santos agreed to transfer 18% interest at an Indonesian location.

North American Markets

Dow Jones Industrial Average declined 196.33 or 2.2% to a close of 8,565.09, S&P 500 Index decreased 25.66 or 2.9% to 875.59, and Nasdaq Composite Index fell 57.60 or 3.7% to close at 1,507.9. In Toronto, TSX Composite Index dropped 242.10 or 2.8% to 8,391.90.

Of the stocks in Dow Jones Industrial Average 2 increased and 28 declined and none was unchanged.

Chevron Corp rose 1.3% and Johnson & Johnson gained 0.8%.

JP Morgan Chase led decliners in the Dow with a fall of 11% followed by decrease in Bank of America of 10.7%, in General Motors of 10.5%, in Citigroup Inc of 8.8% and in American Express 6.6%.

Of the stocks in S&P 500 index, 59 increased, 439 decreased and 2 were unchanged. Of the index stocks, 13 fell more than 3%, 269 closed above 3% and 55 surged more than 10%.

Prologis led decliners in the S&P 500 index with a fall of 25% followed by losses in Apartment Investment Corp of 21%, in Equity Residential Properties of 21%, in Developers Diversified Corp of 20.1%, in Ciena Corp of 20% and in Kimco Realty of 18.1%.

United Health Gropu led gainers in the S&P 500 index with a surge of 9% followed by increases in Hess Corp of 6.8%, in McKesson Corp of 6.4%, in AmerisourceBergen of 5.8% and in Sun Microsystems of 4.2%.

South American Markets Indexes

Mexico fell 1.3% and Brazil declined 1.24%.

Argentina led gainers in the region with a rise of 2.7% followed by gains in Colombia with a gain on 1.24%, in Chile of 0.3%, in Peru of 0.24% and in Venezuela of 0.17%.

Europe Markets Review

In London FTSE 100 Index closed higher 21.41 or 0.49% to 4,388.69, in Paris CAC 40 Index decreased 14.18 or 0.43% to close at 3,306.13 and in Frankfurt DAX index lower 37.68 or 0.78% to close at 4,767.20. In Zurich trading SMI decreased 22.06 or 0.38% to close at 5,729.85.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 60.31 or 0.70% to 8,720.55, Hang Seng index in Hong Kong increased 36.16 or 0.23% closed to 15,613.90 CSI 300 index in China lower 50.06 or 2.39% closed to 2,046.34. ASX 200 index in Australia decreased 42.70 or 1.17% to close 3,598.00. The KL Composite index in Malaysia higher 6.02 or 0.70% closed to 860.68.

The Kospi Index in South Korea increased 8.56 or 0.75% to close at 1,154.43. SET index in Thailand closed higher 0.82 or 0.19% to 424.61 and JSE Index in Indonesia increased 0.80 or 0.06% to 1,316.69. The Sensex index in India decreased 9.44 or 0.10% closed to 9,645.46.

Commodities, Metals, and Currencies

Crude oil increased $3.88 to close at $47.40 a barrel for a front month contract, natural gas decreased 12 cents to $5.56 per mBtu and gasoline futures increased 9.59 cents to close at 106.46 cents per gallon.

Wheat futures closed down 2 cents in Chicago trading and closed at $5.07 a bushel. Sugar increased 0.27 cent to 11.89 cents a pound. Soybean future closed up 25.75 cent to $8.6050 a bushel.

Gold increased $13.20 in New York trading to close at $822.00 per ounce, silver closed up 14 cent to $10.34 per ounce and copper for the front month delivery increased 0.45 cent to $1.50 per pound.

Dollar edged lower against euro to $1.3356 and dropped against yen to 91.40.

Yields on 10-year U.S. bonds decreased to 2.60% and with 30-year maturities decreased to 3.06%.