U.S. Stocks Await Bank Plan Details

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

In New York trading stocks edged lower as U.S. lawmakers debate and traders and economists look for the stimulus package details. NYSE Euronext dropped after it reported quarterly losses of $1.34 billion after it booked $1.60 billion of write down related to France based Euronext acquisition.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks edged lower ahead of bank bailout plan and economic stimulus package debate in the U.S. Senate.[/R]

In New York trading stocks edged lower as U.S. lawmakers debate and traders and economists review details of the stimulus package.

The current bank bailout plan operating under TARP launched under Treasury secretary Henry Paulson has been largely ineffective and poorly administered. Paulson promised that the plan is an investment and not expenditure but in less than six months of its implementation the U.S. government has lost nearly $78 billion according to the U.S. GAO.

NYSE Euronext dropped after it reported quarterly losses of $1.34 billion after it booked $1.60 billion of write down related to Paris, France based Euronext acquisition.

General Electric and Hartford Financial led the gainers in trading on the speculation that bank bailout plan will include non-bank financial services companies. Coca Cola Company dropped after a deal between its Australian bottler and Asian beverage company was canceled.

European market indexes edged lower despite a rise in banks in Frankfurt and auto stocks in Paris. France is expected to unveil a second bailout package for the auto industry and is likely to commit as much as 6 billion euros. Banks rose after Barclays in UK reported better than expected earnings.

The benchmark UK stock index rose marginally led by Barclays after the lender reported a strong second half performance leveraged by the acquisition of Lehman Brothers North American business. Of the FTSE 100 index stocks, 65 rose, 36 declined, and one was unchanged.

The ministry of finance in Japan reported that the current account surplus declined 34.3% to 16.28 trillion yen in 2008, falling the most in three years. Corporate bankruptcies in Japan climbed 15.8% to 1,360 cases in January, increasing the most since 2003.

Stocks in Shanghai surged and in Hong Kong edged higher after a steady rise in commodities prices. Commodities and stocks linked to the industry maintained their momentum on the hopes that the government stimulus will sustain the demand.

The statistical agency of India estimated growth in the second half in the current year in India at a slower pace and for the year estimated a growth of 7.1%. Manufacturing industry association survey indicated a decline in production among 96 industry sub groups. Stocks surged.

In Australian trading, BG Group launches a rival bid for Pure Energy. The all cash bid offered for the company A$796 million and the bid may be revised if Arrow Energy raises its offer of cash and stock. Job placement ads in January across the nation declined 6.3% and fell nearly 40% from a year ago.

American Markets Reviews

Dow Jones Industrial Average increased 9.72 or 0.1% to a close of 8,270.87, S&P 500 gained 1.29 or 0.15% to 869.89, and Nasdaq Composite Index edged lower 0.15 or 0.01% to a close of 1,591.56. In Toronto TSX Composite added 39.26 or 0.4% to close at 9,047.28.

In Latin American trading Brazil Bovespa Index increased 1.5% or 655.38 to 42,100.12 and Mexico Bolsa Index edged higher 0.5% or 98.97 to 20,537.10.

Argentina rose 0.7%, Chile added 0.9%, Peru decreased 0.2% and Colombia edged higher 0.3%. Venezuela gained 0.3%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 219 increased, 276 declined and 5 were unchanged.

Pulte Homes Inc led the decliners in the S&P 500 index with a loss of 7.9% followed by losses in King Pharmaceuticals with a loss of 7%, in New York Times of 6.5%, in Lennar Corp of 6.4%, in Lincoln Nasdaq OMX Group of 6.3%.

American Capital led gainers in the S&P 500 index with a rise of 22% followed by gains in Hartford Financial Services of 18.5%, in Genworth Financial of 15.5%, in General Electric of 13.8% and Bank of America of 12.4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 107.59 or 1.33% to 7,969.03, Hang Seng index in Hong Kong increased 114.02 or 0.84% closed to 13,769.06, CSI 300 index in China higher 59.39 or 2.65% closed to 2,296.67. ASX 200 index in Australia increased 38.70 or 1.12% closed to 3,508.60. Markets of Malaysia were closed today.

The Kospi Index in South Korea decreased 7.57 or 0.63% to close at 1,202.69 and JSE Index in Indonesia decreased 8.42 or 0.62% closed to 1,342.23. The Sensex index in India increased 283.03 or 3.04% closed to 9,583.89. Markets of Thailand were closed today.

Europe Markets Review

In London FTSE 100 Index closed higher 15.74 or 0.37% to 4,307.61, in Paris CAC 40 Index increased 12.08 or 0.39% to close at 3,134.87 and in Frankfurt DAX index higher 22.19 or 0.48% to close at 4,666.82. In Zurich trading SMI increased 35.41 or 0.69% to close at 5,158.50.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.99% and on 30-year bonds advanced to 3.64%.

The U.S. dollar dropped to $1.3010 to a euro and against the Japanese yen inched higher to 91.43 yen.

Immediate futures prices of Texas crude oil decreased $0.31 to $39.86 a barrel, for natural gas increased $0.05 cent to $4.82 per mbtu and gasoline prices decreased 2.93 cents to 124.55 cents a gallon.

Futures of corn increased 0.25 cent to $3.775, soybean increased 1.00 cents to $10.02, sugar increased 16 cents to 13.28 a pound and wheat decreased 8.00 cent to $5.65 a bushel.

In metals trading, copper prices fell 2 cents to $1.6085 a pound, gold decreased $17.60 to $896.70 per ounce and silver decreased 32 cents to $12.83.