Banks Gyrate in New York Trading

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

U.S. stocks gyrated as banks traded up and down and closed higher. Citigroup inches closer to agree with federal regulators and the U.S. Treasury to increase the government stake in the bank, falling short of effective nationalization. Regional banks rebounded at close but remain depressed.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks traded volatile as investors flee banking stocks.[/R]

U.S. stocks gyrated as banks traded up and down and closed higher. Citigroup inches closer to agree with federal regulators and the U.S. Treasury to increase the government stake in the bank, falling short of effective nationalization. Regional banks rebounded at close but stocks remain depressed and trade at near multi-decade lows.

Agrium Inc makes an unsolicited offer to acquire CF Industries that values the fertilizer distributor at $3.6 billion, while CF is pursuing Terra Industries. The proposed merger between the two fertilizer makers and retailers is expected to save $150 million a year after three years.

European market indexes dropped for the fourth day in a row. Indexes declined today on the weak U.S. home sales report and worries that banks may need more capital. EU issues guidelines to segregate toxic bank assets and puts limitation on dividend and executive compensation. Accor chairman quits.

U.K. gross domestic product declines 1.5% in the fourth quarter and the estimate of decline from a year ago was revised to a shrink of 1.9%. Barratt Developments losses rise and see no sign of turnaround in the business till the lending environment improves.

Ambac Financial, the second largest U.S. bond insurer reported fourth quarter loss of $2.34 billion on higher loan loss reserve. Stocks close higher in Asia after the Fed Chairman Bernanke assured that U.S. banks will not be nationalized.

Japan exports plunged in January by 45.7% to 3.5 trillion yen and recorded its highest monthly trade deficit in twenty eight years. Advertising spending falls 4.7% in 2008. Advantest Corp, the maker of chip assembly and testing equipment forecasted 60% decline in sales and plans to cut 1,200 jobs.

Hong Kong government proposed a raft of tax subsidies to individuals, increase education spending and provide funding for job retraining in its latest budget proposal. The increased spending will drive the budget deficit higher. HK estimated economy to shrink between 2% and 3% in the current year.

Indian government is preparing to release third economic stimulus plan that includes reduction in service tax and other excise taxes on manufactured goods. The latest package is focused on businesses and lowers tax burden to manufacturers. India also unveiled port modernization plan.

Australian wages unexpectedly rose 1.2% in the fourth quarter from the previous quarter and rose more than 4% from a year ago period. Stocks declined on weak earnings from Pacific Brands and Seven Network. Pacific Brand also announced plans to cut 1,850 jobs in the next eighteen months.

American Markets Reviews

Dow Jones Industrial Average decreased 80.05 or 1.09% to a close of 7,270.89, S&P 500 Index declined 764.90 or 1.07% to 764.90, and Nasdaq Composite Index edged lower 16.40 or 1.14% to a close of 1,425.43. In Toronto TSX Composite gained 72.97 or 0.9% to close at 7,923.30.

In Latin American trading, Mexico Bolsa Index decreased 95.41 or 0.52% to 18,200.70 and Brazil Bovespa Stock Index dropped 1.25% or 483.06 to 38,231.58.

Argentina dropped 2.12%, Chile decreased 0.29%, Peru increased 0.6% and Colombia added 1.4%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 127 increased, 369 declined and four were unchanged.

Jones Apparel led the decliners in the S&P 500 index with a loss of 19.70% followed by losses in American Capital of 18.2%, in Wynn Resorts Limited of 15.7%, in Lincoln National Corp of 14.1%, in Office Depot Inc of 12.70%.

Fifth Third Bancorp led gainers in the S&P 500 index with a surge of 33.8% followed by gains in SunTrust Banks of 18%, in Huntington Bancorp of 17.7%, in General Motors of 14.8% and in Regions Financial of 14%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 192.66 or 2.65% to 7,461.22, Hang Seng index in Hong Kong increased 206.56 or 1.61% closed to 13,005.08, CSI 300 index in China higher 2.40 or 0.10% closed to 2,304.25. ASX 200 index in Australia decreased 4.10 or 0.12% closed to 3,327.50. The KL Composite index in Malaysia higher 2.44 or 0.27% closed to 896.51.

The Kospi Index in South Korea increased 3.20 or 0.30% to close at 1,067.08. SET index in Thailand closed higher 2.92 or 0.68% to 434.24 and JSE Index in Indonesia increased 4.24 or 0.33% closed to 1,300.11. The Sensex index in India increased 80.50 or 0.91% closed to 8,902.56.

Europe Markets Review

In London FTSE 100 Index closed higher 32.54 or 0.85% to 3,848.98, in Paris CAC 40 Index decreased 11.13 or 0.41% to close at 2,696.92 and in Frankfurt DAX index lower 49.54 or 1.27% to close at 3,846.21. In Zurich trading SMI decreased 20.52 or 0.43% to close at 4,702.50.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.93% and on 30-year bonds increased to 3.59%.

The U.S. dollar edged higher to $1.2732 to a euro and against the Japanese yen inched higher to 97.88 yen.

Immediate futures prices of Texas crude oil increased $0.22 to $42.72 a barrel, for natural gas increased $0.04 cent to $4.07 per mbtu and gasoline prices increased 0.47 cents to 117.14 cents a gallon.

Futures of corn increased 1 cent to $3.7325, soybean decreased 0.50 cents to $8.7950, sugar gained to 0.29 a pound to 13.42 and wheat decreased 0.25 cents to $5.35 a bushel.

In metals trading, copper prices increased 1.25 cents to $1.543 a pound, gold decreased $13.10 to $953.10 per ounce and silver decreased 0.20 cent to $13.71.