Weak GE Earnings, Citigroup Raies $12 Billon

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

U.S. stocks traded sideways on weak earnings and continued worries of the financial system health. Citigroup raised $12 billion in a largest FDIC guaranteed offering. President Obama promised tighter oversight of TARP funds after former Merrill Lynch chief used $1.2 million to renovate his office.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – General Electric continues to trade with a negative bias after 44% decline in earnings. Citigroup raised $12 billion with the government guarantee.[/R]

U.S. stocks traded sideways on the mixed earnings and continued worries of the financial system health. Citigroup raised $12 billion in a largest FDIC guaranteed offering. Apollo Management, one of the largest private equity fund manager raised $15 billion despite the toughest time in the merger and leveraged buyout business. President Obama promised tighter oversight of TARP funds after former Merrill Lynch chief used $1.2 million to renovate his office in New York City.

Advanced Micro dropped more than 10% on 33% fall in sales and a net loss. Barclays declined for the ninth day in a row. Caterpillar dropped on the worries that sales and earnings will be lower than expected. Wyeth rose 8% after Pfizer is expected to launch a rival bid.

Sony estimated first annual loss in fourteen years demand for games, electronics and entertainment products fall. Samsung in Korea also reported weak outlook for memory chips. The benchmark index in Tokyo trading dropped 3.8%. Toyota will cut full time staff for the first time in sixty years.

Stocks in Hong Kong traded with a negative bias on the earnings worries and continued malaise in U.S. and UK financial system. China Railways, Sinopec and Chalco estimated sharp declines in profit in the latest quarter. Hong Kong also cut aviation fuel surcharge by 44%.

Mumbai benchmark stock index declined 1.6% on mixed earnings and worries that the economy may decelerate faster than estimated. The government is expected to release interim budget in February before the general election in May. The government is expected offer subsidies for interest rate for homes.

Stocks in Australia plunged on the growing worries of widening recession and rising expectations of higher unemployment. Former RBA governor Fraser estimated that the current recession will be deeper and last longer than the previous recession. Unemployment rate is expected to cross 6% in 2009.

American Markets Reviews

Dow Jones Industrial Average decreased 45.24 or 0.6% to a close of 8,077.56, S&P 500 rose 4.45 or 0.5% to 831.95, and Nasdaq Composite Index increased 11.80 or 0.8% to a close of 1,477.29. In Toronto TSX Composite increased 141.41 or 1.67% to close at 8,627.97.

In South American trading Brazil Bovespa Index increased 0.6% or 238.02 to 19,348.81 and Mexico Bolsa Index edged higher 0.2% or 42.08 to 19,348.81.

Argentina rose 0.8%, Chile increased 0.04%, Peru rose 1.6% and Colombia edged higher 0.5%. Venezuela declined 0.3%.

U.S. Stock Movers

Of the S&P 500 index, 315 increased, 181 fell and 4 were unchanged.

Southwest Air led decliners in the S&P 500 index with a loss of 18% followed by losses in Capital One Financial of 11.6%, in General Electric of 11%, in Xerox Corp of 7.7% and in Harley Davidson of 7.4%.

MBIA Inc led gainers in the S&P 500 index with a rise of 17.5% followed by increase in Hartford Financial Services of 15.7%, in Wyeth of 13.3%, in Comerica Inc 13.1%, in CIT Group Inc of 12.3% and in SunTrust Banks of 11.1%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 306.49 or 3.81% to 7,745.25, Hang Seng index in Hong Kong decreased 79.39 or 0.63% closed to 12,578.60 CSI 300 index in China lower 11.87 or 0.58% closed to 2,032.68. ASX 200 index in Australia decreased 144.10 or 4.13% closed to 3,342.70. The KL Composite index in Malaysia lower 6.33 or 0.72% closed to 872.69.

The Kospi Index in South Korea decreased 22.83 or 2.05% to close at 1,093.40. SET index in Thailand closed lower 4.75 or 1.08% to 433.52 and JSE Index in Indonesia decreased 11.74 or 0.88% closed to 1,315.58. The Sensex index in India decreased 139.49 or 1.58% closed to 8,674.35.

Europe Markets Review

In London FTSE 100 Index closed higher 0.24 or 0.01% to 4,052.47, in Paris CAC 40 Index decreased 20.48 or 0.71% to close at 2,849.14 and in Frankfurt DAX index lower 40.48 or 0.96% to close at 4,178.94. In Zurich trading SMI decreased 22.53 or 0.42% to close at 5,306.91.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.62% and on 30-year bonds increased to 3.32%.

The U.S. dollar rose to $1.2969 to a euro and against the Japanese yen fell to 88.77 yen.

Immediate futures prices of Texas crude oil increased to $2.80 to $46.47 a barrel, for natural gas decrease 16 cents to $4.52 per mbtu and gasoline prices increased 6.10 cents to 115.44 cents a gallon.

Futures of corn increased 3 cent to $3.905, soybean decreased 3.0 cents to $10.1009, sugar increased 0.32 cents to 12.70 a pound and wheat increased 16 cent to $5.82 a bushel.

In metals trading, copper prices rose 5.44 cents to $1.4720 a pound, gold increased $37.20 to $897.70 per ounce and silver increased 57 cents to $11.94.