Obama Focuses on Economy; Markets Plunge

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

Barack Hussein Obama took oath as the 44th president of the United States and asked Americans to take responsibilities for rebuilding the America. In New York trading investors dumped banks, asset managers and indexes plunged between 4% and 5%. UK was forced to offer second and a larger bailout.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – In New York trading investors dumped banks and asset managers. Bank of America, Regions Financial and Citigroup may need more than $100 billion to restore required capital this year. UK was forced to offer second and a larger bailout in less than three months.[/R]

U.S. markets dived on the worries that the financial system may be sliding rapidly into abyss various proposed government program will take long before the economy recovers. The markets also took a cautious view of the second and larger bailout offered by the UK to banks. The UK treasury will provide 100 billion pounds assistance to banks to restore their capital but the plan will significantly dilute the common shareholders.

Barack Hussein Obama took oath as the 44th president of the United States and asked Americans to take responsibilities for rebuilding the America. The widely anticipated inauguration speech was viewed by more than two million in Washington, D.C. and nearly 900 million people watched the ceremony live on television around the world.

He stressed a sharp departure from the past policies of the Republican parties and Bush administration that favored lightly regulated free markets and unilateral military invasions.

Obama stressed the need for the country to unite regardless of the religion and faith and stressed that the free markets should not favor only the rich and elite.

American Markets Reviews

Dow Jones Industrial Average plunged 332.13 or 4.01% to a close of 7,949.09, S&P 500 decreased 44.90 or 5.28% to 805.22, and Nasdaq Composite Index dropped 88.47 or 5.78% to a close of 1,440.86. In Toronto TSX Composite decreased 336.55 or 3.81% to close at 8,504.93.

In South American trading Brazil Bovespa Index decreased 4.01% or 1,556.25 to 37,272.07 and Mexico Bolsa Index dropped 5.8% or 1,180.39 to 19,213.02.

Argentina Merval Index plunged 5.8%, Chile Stock Market Select Index decreased 0.84%, Peru decreased 1.3% and Colombia decreased 0.1%. Venezuela added 0.5%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 441 declined, 58 rose and 1 was unchanged.

State Street Corp led the decliners with a plunge of 48% followed by losses at PNC Financial of 31%, in Bank of New York Mellon Corp of 20.5%, in Regions Financial of 20%, Bank of America of 17% and in Wells Fargo of 16.9%.

Newmont Mining led the gainers in the S&P 500 index with a rise of 7% followed by increase in Noble Energy Inc of 6%, in Precision Castparts of 5.6%, in Washington Post of 4.6%, in SLM Corp of 3.7% and in Supervalu Inc of 3.7%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 191.06 or 2.31% to 8,065.79, Hang Seng index in Hong Kong decreased 380.22 or 2.85% closed to 12,959.77 CSI 300 index in China higher 12.72 or 0.63% closed to 2,025.19. ASX 200 index in Australia decreased 112.70 or 3.14% closed to 3,476.60. The KL Composite index in Malaysia lower 9.91 or 1.11% closed to 880.37.

The Kospi Index in South Korea decreased 23.84 or 2.07% to close at 1,126.81. SET index in Thailand closed lower 2.52 or 0.58% to 433.19 and JSE Index in Indonesia decreased 6.54 or 0.48% closed to 1,344.15. The Sensex index in India decreased 229.02 or 2.45% closed to 9,100.55.

Europe Markets Review

In London FTSE 100 Index closed lower 17.079 or 0.42% to 4,091.40, in Paris CAC 40 Index decreased 64.41 or 2.15% to close at 2,925.28 and in Frankfurt DAX index lower 76.29 or 1.77% to close at 4,239.85. In Zurich trading SMI decreased 60.37 or 1.12% to close at 5,321.00.

Commodities, Bonds and Currencies

Yields on 10-year bond were increased to 2.37% and on 30-year bonds were increased to 2.97% in Friday.

The U.S. dollar rose to $1.2898 to a euro and against the Japanese yen fell to 89.73 yen.

Immediate futures prices of Texas crude oil decreased to $1.71 to $40.86 a barrel, for natural gas decreased 11 cents to $4.68 per mbtu and gasoline prices decreased 2.42 cents to 114.30 cents a gallon.

Futures of corn decreased 7.50 cent to $3.835, soybean decreased 28 cents to $9.920, sugar increased 0.33 cents to 12.59 a pound and wheat decreased 28.25 cent to $5.50 a bushel.

In metals trading, copper prices fell 4.45 cents to $1.48 a pound, gold increased $18.00 to $857.90 per ounce and silver decreased 3 cents to $11.18.