U.S. Stocks Decline 1%; Weak Home Sales

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

U.S. stocks declined after home sales dropped to another low in November. Sales are likely to decline further in December and in the first quarter of the next year as job losses mount. The U.S. third quarter GDP data was left unchanged and UK current account deficit increased.

4:30PM New York, 10:30PM Frankfurt, 7:30AM Sydney[R]– U.S. stocks averages dropped 1% after new and existing home sales declined. UK current account deficit widened. Stocks in Hong and Kong and Shanghai dropped after smaller than expected rate cut.[/R]

Global Markets

U.S. existing home sales declined at a faster pace in November and median price of a home fell too. The home sales were the steepest in the Northeast followed by the South. The new home sales declined at 2.9% annual rate to 407,000 homes. The third quarter estimate of GDP decline was left unchanged at 0.5%.

UK current account deficit in the third quarter rose to 2.1% of gross domestic product or £7.7 billion and in the second quarter GDP shrank at 1.8% rate. Service sector output in October increased 0.6% from September. Mortgage lending in November rose.

China foreign currency reserves drop below US$1.9 trillion. Retail sale of consumer goods in China is likely to jump 21% in the year ending in December. Stocks in Hong Kong dropped 2.8% and in Shanghai plunged 4.9% on the worries that recent rate cut may not be sufficient.

Stocks in Mumbai dropped 2.4% on the worries that global financial crisis will deepen and foreign investment to India may suffer. The government urged Reserve Bank of India to lower rates further but did not indicate when. Wipro agrees to pay $127 million to acquire Citi Technology Services.

For the third straight quarter New Zealand GDP declined. In the quarter ending in September, economy shrank 0.4% after dropping 0.2% in the previous quarter. The economy also declined 0.1% from a year ago, a first annual decline in a year. HFA Holdings plunged after it halted redemptions.

North American Markets

Dow Jones Industrial Average lost 100.28 or 1.2% to a close of 8,419.49, S&P 500 Index decreased 8.48 or 0.97% to 863.15, and Nasdaq Composite Index declined 10.81 or 0.71% to close at 1,521.54. In Toronto, TSX Composite Index increased 0.7% or 60.23 to 8,309.76.

Of the stocks in Dow Jones Industrial Average 6 increased and 24 declined.

General Motors led decliners in the Dow with a loss of 13.9% followed by losses in Bank of America of 5.3%, in Citigroup Inc of 2.9%, in American Express of 2.4%, in Boeing Company of 2.1% and in JP Morgan Chase of 2%.

Alcoa Inc led gainers in the Dow with a rise of 3.6% followed by increase in General Electric of 2.4%, in Merck & Company of 1.4%, in Microsoft Corp of 0.5% and in Exxon Mobil Corp of 0.4%.

Of the stocks in S&P 500 index, 121 increased, 374 decreased and 5 were unchanged. Of the index stocks, 66 fell more than 3%, 14 closed above 3%.

Dynegy Inc led gainers in the S&P 500 index with a rise of 4.2% followed by increase in Newell Rubbermaid of 4.1%, in Kimberly-Clark of 2.6%, in AON Corp of 2.4%, in Pepsi Bottling 2.3% and in Stryker Corp of 2.8%.

Jones Apparel led decliners in the S&P 500 index with a loss of 20.4% followed by declines in Textron Inc of 20.2%, in Ford Motor Company of 15.8% and in General Motors of 14%.

South American Markets Indexes

Brazil led decliners in the region with a loss of 3.1% followed by losses in Argentina of 0.7%, in Colombia of 0.6% and in Venezuela of 0.40%.

Peru led gainers in the region with a rise of 0.6% followed by increase in Mexico of 0.5% and in Chile of 0.1%.

Jamaica dropped 2.4% in Caribbean trading.

Europe Markets Review

In London FTSE 100 Index closed higher 6.82 or 0.16% to 4,255.98, in Paris CAC 40 Index decreased 22.95 or 0.73% to close at 3,128.41 and in Frankfurt DAX index lower 9.64 or 0.21% to close at 4,629.38. In Zurich trading SMI decreased 19.14 or 0.37% to close at 5,399.58.

Asian Markets Review

Hang Seng index in Hong Kong decreased 401.60 or 2.75% closed to 14,220.79 CSI 300 index in China lower 98.59 or 4.89% closed to 1,918.96. ASX 200 index in Australia decreased 26.00 or 0.73% to close 3,531.40. The KL Composite index in Malaysia lower 2.27 or 0.26% closed to 871.16. Markets in Japan were closed today.

The Kospi Index in South Korea decreased 35.30 or 2.99% to close at 1,144.31. SET index in Thailand closed higher 6.32 or 1.46% to 440.40 and JSE Index in Indonesia decreased 1.59 or 0.12% to 1,343.72. The Sensex index in India decreased 241.60 or 2.43% closed to 9,686.75.

Commodities, Metals, and Currencies

Crude oil decreased 2.2% or $0.88 to close at $39.03 a barrel for a front month contract, natural gas increased 40 cents to $5.70 per mBtu and gasoline futures decreased 2.62 cents to close at 86.00 cents per gallon.

Wheat futures closed up 6.25 cents in Chicago trading and closed at $5.75 a bushel. Sugar was unchanged in trading at 10.85 cents a pound. Soybean future closed up 14.50 cent to $9.05 a bushel.

Gold decreased $7.20 in New York trading to close at $840.00 per ounce, silver closed down 58 cent to $10.28 per ounce and copper for the front month delivery decreased 6.65 cents to $1.28 per pound.

Dollar edged lower against euro to $1.3966 and fell against yen to 90.90.

Yields on 10-year U.S. bonds closed unchanged to 2.17% and with 30-year maturities increased to 2.67%.