U.S. Stocks Close Lower; Smith Barney Shopped

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

Weaker than expected December payroll report put investors on the defensive. Leading indexes in the stock markets declined for the third day in a row. Retailers led the decliners on lowered earnings expectations. Crude oil decline. Markets in Asia and Europe fell. Citi to sell Smith Barney unit.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks dropped for the third day in a row after jobless claims rose in December more than expected.[/R]

U.S. stocks edged lower after unemployment rate crossed 7% and 524,000 jobs were lost in December. For the year 2.6 million people lost jobs. Construction, manufacturing and retail sectors lost bulk of the jobs in the year. KB Home plunged and dragged other home builder after a large loss.

Retail stocks continue to decline for the second day in a row on weak earnings outlook. Weaker than expected job report and larger than expected loss at KB Home dragged home builders lower. Apollo Group surged on earnings rise of 29%. Coach and Jones Apparel declined.

Stocks in Hong Kong edged lower and in Shanghai rose 1.6% on Friday but fell sharply for the week. Benchmark index in Hong Kong fell 4.4% for the week. A survey of businesses suggested a weak confidence and projected that the weakness is likely to persist till 2010. Lenovo Group fell on a downgrade.

Indian stocks fell for the second day after Satyam scandal rattled investors. The Satyam chief Raju was arrested later in the evening. Oil executives strike entered the third day but in the late evening strike was called off. The benchmark index Sensex 1.9%.

Stocks in Australia gain 1.1% on a rise on gold price. Santos plans to add more people at its LNG plant in partnership with Malaysia. HFA Holdings led gainers in the index shares with a rise of 37.9% followed by Centro Retail Group rising 20%.

U.S. Markets Reviews

Dow Jones Industrial Average edged lower by 143.28 or 1.64% to a close of 8,599.18, S&P 500 decreased 19.38 or 2.13% to 890.35, and Nasdaq Composite Index declined 45.42 or 2.81% to a close of 1,571.59. In Toronto TSX Composite decreased 159.16 or 1.73% to close at 9,062.42.

U.S. Stock Movers

Of the stocks in S&P 500 index, 438 declined, 57 increased and 5 were unchanged.

AK Steel Holding led decliners in the S&P 500 index with a loss of 14.1% followed by losses in Lennar Corp of 13.2%, in Jones Apparel of 12.9%, in Coach Inc of 11.7%, in CVS Caremark Corp 11.5%, in RR Donnelley & Sons of 10.1% and in Haliburton Company of 9.6%.

Apollo Group led the gainers in S&P 500 index with a rise of 12.7% followed by increase in Stryker Corp of 5.7%, in SLM Corp of 4.6%, in Tyson Foods of 4.2% and in Becton Dickinson of 4.1%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 39.62 or 0.45% to 8,836.80, Hang Seng index in Hong Kong decreased 38.47 or 0.27% closed to 14,377.44 CSI 300 index in China higher 30.37 or 1.61% closed to 1,918.36. ASX 200 index in Australia increased 41.40 or 1.12% to close 3,735.70. The KL Composite index in Malaysia higher 8.55 or 0.94% closed to 919.07.

The Kospi Index in South Korea decreased 24.74 or 2.05% to close at 1,180.96. SET index in Thailand closed lower 5.97 or 1.28% to 459.06 and JSE Index in Indonesia increased 14.01 or 1.00% closed to 1,416.67. The Sensex index in India decreased 180.41 or 1.88% closed to 9,406.47.

Europe Markets Review

In London FTSE 100 Index closed lower 56.83 or 1.26% to 4,448.54, in Paris CAC 40 Index decreased 24.83 or 0.75% to close at 3,299.50 and in Frankfurt DAX index lower 96.02 or 1.97% to close at 4,783.89. In Zurich trading SMI decreased 53.83 or 0.94% to close at 5,697.24.

Commodities, Bonds and Currencies

Yields on 10-year bond declined to 2.39% and on 30-year bonds dropped to 3.04%.

The U.S. dollar declined to $1.3435 to a euro and against the Japanese yen fell to 90.225 yen.

Immediate futures prices of Texas crude oil fell $1.27 to $40.43 a barrel, for natural gas decreased 11 cents to $5.48 per mbtu and gasoline prices increased 2.47 cents to 111.29 cents a gallon.

Futures of corn increased 4.00 cent to $4.10, soybean increased 46.50 cents to $10.36, sugar increased 0.02 cents to 12.05 a pound and wheat rose 17 to $6.29 a bushel.

In metals trading, copper prices rose 6.90 cents to $1.54 per pound, gold increased $0.54 to $854.00 per ounce and silver increased 20 cents to $11.29.