Fed Offers Gloomy Outlook, Home Sales Decline

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

U.S. stocks declined after the latest estimate from the Fed showed a shrink in the economy. New home construction declined to the record low of 466,000 in January and industrial production declined 1.8% in the month. President Obama offered the latest plan for mortgage payment.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks declined after the latest estimate from the Fed showed a shrink in the economy.[/R]

U.S. stocks declined after the Fed estimated the economy to shrink 1.3% this year. The latest estimate on the economy by the Fed may be too optimistic when mot private economists are looking for the economy to shrink between 3% and 5%. New home construction declined to the record low of 466,000 in January and industrial production declined 1.8% in the month.

President Obama offered the latest plan for mortgage payment that will lower monthly payment and keep many homeowners away from foreclosure.

Agilent Technologies, Inc misses profit and will cut 600 jobs. La-Z-Boy Incorporated swings to third quarter loss. Deere & Company first quarter profit falls 45%. MBIA Inc led gainers in the S&P 500 index with a rise of 35.9%.

European stocks fall as OECD economies contract. Daimler AG dropped after rating agency lowered its debt rating outlook. Commerzbank reported full-year operating loss and insurance company AXA reported second half loss. Heineken net profit for full year dropped 87%.

Bank of Japan begins two-day policy meeting. Crude steel production declined 37.8% in January according to the latest data from the industry association. Shipping lines Kawasaki Kisen climbed 3% and Mitsui OSK Lines of 5% after the freight rates index gained.

Stocks in Hong Kong edged higher but investors confidence remain fragile. Investors are increasingly realizing that the current recession is likely to be protracted and may widen further. In Hong Kong, residential prices fell 41% at its most expensive district in the three months to in December.

Stocks in Australia dropped sharply after Wespac reported sharply higher impairment charges. Earnings fell 2% to A$1.2 billion in the three months to December on a pro-forma basis, while total lending rose 2.4% in the period driven by strong mortgage and business lending in Australia.

American Markets Reviews

Dow Jones Industrial Average increased 3.03 or 0.04% to a close of 7,555.63, S&P 500 dropped 0.75 or 0.1% to 788.42, and Nasdaq Composite Index edged down 2.69 or 0.18% to a close of 1,467.97. In Toronto TSX Composite lost 202.75 or 2.42% to close at 8,175.95.

In Latin American trading Brazil Bovespa Index decreased 172.58 or 0.4% to 39,674.39 and Mexico Bolsa Index dropped 112.66 or 0.60% to 18,741.27.

Argentina declined 1.7%, Chile rose 0.6%, Peru decreased 0.4% and Colombia edged lower 1.20%. Venezuela gained 2.2%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 192 increased, 392 declined and 6 were unchanged.

Ffith Third Bancorp led the decliners in the S&P 500 index with a loss of 12% followed by losses in Wyndham Worldwide with a loss of 11.7%, in Agilent Tech of 9.1%, in American Capital of 9.1%, in CIT Group Inc of 8.5%.

MBIA Inc led gainers in the S&P 500 index with a rise of 29.6% followed by gains in Prologis of 12.8%, in Leucadia National of 8.2%, in Capital One Financial of 8.1% and in XL Capital Ltd of 6.3%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 111.07 or 1.45% to 7,534.44, Hang Seng index in Hong Kong increased 70.60 or 0.55% closed to 13,016.00, CSI 300 index in China lower 109.45 or 4.59% closed to 2,275.84. ASX 200 index in Australia decreased 51.10 or 1.48% closed to 3,413.20. The KL Composite index in Malaysia lower 3.30 or 0.37% closed to 895.23.

The Kospi Index in South Korea decreased 14.00 or 1.24% to close at 1,113.19. SET index in Thailand closed higher 1.38 or 0.31% to 439.60 and JSE Index in Indonesia increased 12.57 or 0.95% closed to 1,330.61. The Sensex index in India decreased 19.82 or 0.22% closed to 9,015.18.

Europe Markets Review

In London FTSE 100 Index closed lower 27.30 or 0.68% to 4,006.83, in Paris CAC 40 Index decreased 1.16 or 0.04% to close at 2,874.07 and in Frankfurt DAX index lower 11.64 or 0.28% to close at 4,204.96. In Zurich trading SMI increased 14.16 or 0.29% to close at 4,955.47.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.74% and on 30-year bonds increased to 3.58%.

The U.S. dollar edged higher to $1.2592 to a euro and against the Japanese yen inched higher to 93.62 yen.

Immediate futures prices of Texas crude oil decreased $0.03 to $34.59 a barrel, for natural gas increased $0.03 cent to $4.24 per mbtu and gasoline prices increased 9 cents to 106.61 cents a gallon.

Futures of corn decreased 0.01 cent to $3.49, soybean increased 2.50 cents to $8.89, sugar declined to 0.27 a pound to 13.01 and wheat increased 2 cents to $5.25 a bushel.

In metals trading, copper prices increased 0.80 cents to $1.46 a pound, gold increased $1.10 to $979.30 per ounce and silver decreased 3 cent to $14.25.