Obama Budget, Stocks Fall

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

President Obama proposed a budget that increase tax for wealthy, multinationals and oil companies, increase spending on infrastructure and defense and cut subsidies for rich farmers, leveraged buy out deals and healthcare payments. He also proposed to spend heavily to shore up faltering banks.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – President Obama proposed a budget that increase tax for wealthy, increase spending infrastructure and defense and cut subsidies for rich farmers, leveraged buy out deals and healthcare payments. He also proposed to spend heavily to shore up faltering banks.[/R]

Global markets continue to trade downward as economic slump widen around the world while U.S. lawmakers waver. Japan automakers slash production. General Motors report second worst annual loss. UBS replaces its chief in less than two years and looks for ways to slash operating costs.

Student loan lender SLM Corp led the decliners in the S&P 500 index with a loss of 30% after the President Obama proposed to cut subsidies. Aegean Marine Petroleum Network, Inc posts strong fourth quarter earnings. Donaldson Company, Inc second quarter profit down slightly. General Motors Corporation reports $9.6 billion loss for fourth quarter.

European stocks rebound after a decline for four days in a row on the optimism that the region wide government bailout of the banking sector will stabilize financial markets. German unemployment increased for the fourth month in a row.

Three largest automakers in Japan slash production as domestic market remains weak and exports to the U.S. plunge. Toshiba Corp is in a deal to build two nuclear power plants in south Texas. Rising oil prices dragged commodities linked stocks lower.

Inflation in India dropped. The weekly measure of annualize inflation index declined to 3.36% at the end of second week in February, lifting market averages. The commerce minister Nath announced additional measures to boost traditional goods and estimated exports of $175 billion in the current year.

Australian stock indexes rose fractionally after capital expenditure advanced more-than-forecasted in the three months to December. Energy stocks also increased as crude oil prices increased to $42 a barrel. Lend Lease operating profit in the six months ended December dropped 27%.

American Markets Reviews

Dow Jones Industrial Average decreased 88.81 or 1.2% to a close of 7,182.08, S&P 500 Index declined 12.07 or 1.6% to 752.83, and Nasdaq Composite Index edged lower 33.96 or 2.4% to a close of 1,391.47. In Toronto TSX Composite gained 254.52 or 3.2% to close at 8,186.82.

In Latin American trading, Mexico Bolsa Index decreased 153.54 or 0.8% to 18,047.16 and Brazil Bovespa Stock Index dropped 0.1% or 51.40 to 38,180.18.

Argentina dropped 0.12%, Chile decreased 0.8%, Peru decreased 2.5% and Colombia added 1.7%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 131 increased, 364 declined and 5 were unchanged.

SLM Corp led the decliners in the S&P 500 index with a loss of 30.9% followed by losses in Integrys Energy of 26.7%, in Humana Inc of 19.5%, in Developers Diversified of 17.3%, in Supervalu Inc of 16.2%.

Huntington Bancorp led gainers in the S&P 500 index with a surge of 19.2% followed by gains in Fifth Third Banc of 18.1%, in SunTrust Banks of 17.7%, in Aflac Inc of 17.7% and in U.S. Bancorp of 17%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 3.29 or 0.04% to 7,457.93, Hang Seng index in Hong Kong decreased 110.14 or 0.85% closed to 12,894.94, CSI 300 index in China lower 114.07 or 4.95% closed to 2,190.18. ASX 200 index in Australia increased 18.00 or 0.54% closed to 3,345.50. The KL Composite index in Malaysia lower 3.09 or 0.34% closed to 893.42.

The Kospi Index in South Korea decreased 12.29 or 1.15% to close at 1,054.79. SET index in Thailand closed lower 2.30 or 0.53% to 431.94 and JSE Index in Indonesia decreased 9.79 or 0.75% closed to 1,290.32. The Sensex index in India increased 52.30 or 0.59% closed to 8,954.86.

Europe Markets Review

In London FTSE 100 Index closed higher 66.66 or 1.73% to 3,915.64, in Paris CAC 40 Index increased 47.92 or 1.78% to close at 2,744.84 and in Frankfurt DAX index higher 96.41 or 2.51% to close at 3,942.62. In Zurich trading SMI increased 68.28 or 1.45% to close at 4,770.78.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.99% and on 30-year bonds increased to 3.67%.

The U.S. dollar edged higher to $1.2728 to a euro and against the Japanese yen inched higher to 98.4060 yen.

Immediate futures prices of Texas crude oil increased $2.12 to $44.62 a barrel, for natural gas increased $0.06 cent to $4.09 per mbtu and gasoline prices increased 12.53 cents to 129.20 cents a gallon.

Futures of corn decreased 1.75 cent to $3.7050, soybean decreased 11.50 cents to $8.6850, sugar gained to 0.48 a pound to 13.90 and wheat decreased 10.75 cents to $5.25 a bushel.

In metals trading, copper prices increased 3.50 cents to $1.57 a pound, gold decreased $19.00 to $947.20 per ounce and silver decreased 0.82 cent to $13.09.