U.S. Stocks Fall, Earnings Worries

123jump.com Staff
05 Jan, 2009
New York City

U.S. stocks declined on the earnings worries and weak economic cliamte. Manufacturing in China declined for the fifth month in a row. India lowered key lending rate to 8-year low. Auto sales in Japan dropped to a 3-decade low.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks declined on the earnings worries and economic climate.[/R]

U.S. stocks declined on the earnings worries, economic climate and holiday sales. Telecom and banks led the decliners of all traded stocks. Stocks traded volatile. Intercontinental Exchange Inc dropped 13% after analyst lowered earnings estimate.

U.S. auto sales in December declined 36% in December to annual 2008 sales declined to 13.2 million from 16.1 million in 2007.

UK stocks edged higher after crude oil reached $47. Adams Childrenswear Limited shut 111 stores and Waterford Wedgewood Plc appointed administrator for its certain UK subsidiaries. The pound rose 2.4% against the euro. Old Mutual led decliners in the FTSE 100 index with a loss of 10%.

Stocks in Japan rose after the yen fell and on the hopes that U.S. tax relief will stimulate demand for exports from Japan. Vehicle sales in December dropped 23% and for the year declined 6.5% from a year ago. Vehicle sales declined for the fifth year in a row.

Manufacturing index in China dropped for the third month in a row as companies shrink labor force and orders weaken. China plans to unveil stimulus package for auto industry aimed at encouraging sale of low emission cars. China issued third generation telecom licenses.

Stocks in Mumbai surged after the Reserve Bank of India cut interest rate to eight-year low. In a volatile trading, stocks edged above 10,000. The government lifted restrictions for foreign investors and promised more capital for state controlled banks.

Australian stocks dropped on weak trading on media speculation that the Reserve Bank of Australia is not expected to lower interest rate at the next meeting in February. PanAust led advancers in the ASX 200 index shares with a surge of 106% after rolling over its US$80 million subordinated debt.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 183.56 or 2.07% to 9,043.12, Hang Seng index in Hong Kong increased 520.50 or 3.46% closed to 15,563.31 CSI 300 index in China higher 65.24 or 3.59% closed to 1,882.96. ASX 200 index in Australia decreased 26.80 or 0.72% to close 3,687.00. The KL Composite index in Malaysia higher 26.30 or 2.94% closed to 920.66.

The Kospi Index in South Korea increased 16.17 or 1.40% to close at 1,173.57. SET index in Thailand closed higher 28.73 or 6.39% to 478.69 and JSE Index in Indonesia increased 81.93 or 6.04% to 1,437.34. The Sensex index in India increased 317.38 or 3.19% closed to 10,275.60.

Europe Markets Review

In London FTSE 100 Index closed higher 17.85 or 0.39% to 4,579.64, in Paris CAC 40 Index increased 10.23 or 0.31% to close at 3,359.92 and in Frankfurt DAX index higher 10.92 or 0.22% to close at 4,983.99. In Zurich trading SMI increased 221.56 or 4.00% to close at 5,756.09.

Commodities, Bonds and Currencies

Yields on 10-year bond declined to 2.48% and on 30-year bonds dropped to 3.03%.

The U.S. dollar declined to $1.36 to a euro and against the Japanese yen fell to 93.255 yen.

Immediate futures prices of Texas crude oil rose $2.07 to $48.41 a barrel, for natural gas increase 11.9 cents to $6.09 per mbtu and gasoline prices increased 6.66 cents to 117.71 cents a gallon.

Futures of corn declined 1 cent to $4.11, soybean declined 10 cents to $9.87, sugar fell 3 cents to 11.82 a pound and wheat rose 5.75 to $6.1675 a bushel.

In metals trading, copper prices fell 0.80 cents to $1.45 per pound, gold fell $19.80 to $859.70 per ounce and silver declined 25 cents to $11.25.