U.S. Stocks Fall; Macy's Cuts Jobs, Dividend

123jump.com Staff
02 Feb, 2009
New York City

U.S. stocks declined afer a manufacturing index indicated shrinking activities in the sector. The weak earnings and more layoffs unnerved investors. The second largest retailer Macy''s eliminated 7,000 jobs and cut dividend per share to 5 cents from 13.25 cents and buyback $950 millions of bonds.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks declined after weak earnings, weak earnings and persistent worries of the banking system.[/R]

U.S. stocks fell on the worries that recession is likely to deepen and manufacturing is likely to weaken further. Weak earnings also added to the anxieties of investors. The manufacturing index indicated that the sector shrank but at a slower rate. Macy’s, the second largest retailer announced dividend cut and job cuts of 7,000.

Bank of America faced more skepticism for its recent purchase of Merrill Lynch and the bank may be forced to raise more than $85 billion in bailout from the government. Rockwell Automation dropped on lowered earnings outlook. Piper Jaffray and Mattel dropped on earnings.

UK manufacturing in January declined as domestic orders and export orders weaken. Stocks in London trading dropped after Moody''s lowered its rating on the debt rating for Barclays. Barclays dropped 10%. Rio Tinto rose after Chalco showed interest in acquiring minority interests.

Stocks in Tokyo trading declined 1.5% after Hitachi estimates a loss in the current year. The sharp reversal in the estimate from profit only highlights the widening global recession affecting trade between Japan, China and the U.S. In another confirmation, the office vacancy rose in Tokyo.

Stocks in Hong Kong fell 3.1% after a week-long closure. Investors are increasingly concerned that stimulus package from the government may be not enough and may come too late to prevent the economy from falling further. Stocks in Shanghai rose. Fiscal deficit in China rose 20% in 2008.

Stocks in Mumbai fell after 8% surge in January. The benchmark index Sensex dropped 3.8%. Investors focused on weak exports and falling foreign exchange reserves. Rupee weakened again flirted near record low against dollar. DLF plunged 14% on 69% fall in earnings. M&M net dropped 93%.

Manufacturing in Australia declined in January as miners and supporting businesses shrink production. The sharp fall in the index shows a rapid widening of the slow down in the economy. A separate report showed that home prices in the last quarter ending in December declined in eight large cities.

American Markets Reviews

Dow Jones Industrial Average decreased 64.03 or 0.80% to a close of 7,936.83, S&P 500 decreased 0.44 or 0.05% to 825.44, and Nasdaq Composite Index increased 18.01 or 1.2% to a close of 1,494.43. In Toronto TSX Composite decreased 70.07 or 0.8% to close at 8,624.83.

In Latin American trading Brazil Bovespa Index decreased 1.6% or 634.35 to 38,666.44 and Mexico Bolsa Index edged higher 0.1% or 28.09 to 19,565.14 in Friday’s trading. Mexico celebrated Constitution Day today.

Argentina fell 1.8%, Chile added 0.2%, Peru decreased 1.4% and Colombia edged higher 0.8%. Venezuela edged lower 0.3% in Friday trading.

U.S. Stock Movers

Of the stocks in S&P 500 index, 150 stocks increased, 347 declined and 3 were unchanged.

Huntington Bancorp led decliners in the S&P 500 index with a loss of 30% followed by losses in Regions Financial of 22%, in Mattel Inc of 15.4%, in International Paper of 15.4%, in Office Depot of 15.3% and in Marshall & Ilsley of 15%.

Bank of America, Charles Schwab and Rockwell Automation declined 10%.

Hartford Financial Services led gainers in the S&P 500 index with a rise of 14%, in Humana Inc of 6.8%, in Supervalu Inc of 5.6%, in Apollo Group of 5.2%, in Akamai Technologies Inc of 5.1% and in Sysco Corp of 5%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 120.07 or 1.50% to 7,873.98, Hang Seng index in Hong Kong decreased 416.72 or 3.14% closed to 12,861.49, CSI 300 index in China higher 24.38 or 1.20% closed to 2,057.06. ASX 200 index in Australia decreased 43.30 or 1.22% closed to 3,497.40. Markets of Malaysia were closed today.

The Kospi Index in South Korea decreased 15.16 or 1.30% to close at 1,146.95. SET index in Thailand closed lower 9.84 or 2.25% to 427.85 and JSE Index in Indonesia decreased 22.02 or 1.65% closed to 1,310.64. The Sensex index in India decreased 357.54 or 3.79% closed to 9,066.70.

Europe Markets Review

In London FTSE 100 Index closed lower 71.86 or 1.73% to 4,077.78, in Paris CAC 40 Index decreased 43.87 or 1.48% to close at 2,930.05 and in Frankfurt DAX index lower 67.31 or 1.55% to close at 4,271.04. In Zurich trading SMI decreased 123.09 or 2.33% to close at 5,166.96.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.72% and on 30-year bonds decreased to 3.47%.

The U.S. dollar rose to $1.2832 to a euro and against the Japanese yen dropped to 89.66 yen.

Immediate futures prices of Texas crude oil decreased to $1.53 to $40.15 a barrel, for natural gas increased $0.14 cent to $4.56 per mbtu and gasoline prices decreased 10.11 cents to 116.76 cents a gallon.

Futures of corn decreased 8.50 cent to $3.70, soybean decreased 20.50 cents to $9.59, sugar increased 0.08 cents to 12.75 a pound and wheat decreased 4.25 cent to $5.63 a bushel.

In metals trading, copper prices fell 2.40 cents to $1.4445 a pound, gold decreased $21.40 to $905.90 per ounce and silver decreased 23 cents to $12.36.