Rally in New York Fizzles; Weakness in AmEx

123jump.com Staff
16 Mar, 2009
New York City

U.S. stocks lost earlier gains as markets focused persistent weakness in financial sector and rising delinquencies at American Express. European and Asian markets closed higher on the hopes that governments will spend more money in assisting banks. Barclays suggested stronger than expected business.

4:30PM New York, 10:30PM Frankfurt, 7:30AM Sydney[R]– U.S. stocks lost earlier gains as markets focused persistent weakness in financial sector and rising delinquencies at American Express. European indexes closed higher on the hopes that governments will spend more money in bailing out banks. Asian stocks gained on the hopes that nations will follow up with actions after G-20 pronouncements.[/R]

Global Markets

U.S. stocks declined after rallying for five days in a row. Financial led decliners after American Express disclosed that 5% of its card holders are at least 30 days late in paying their monthly bills. Investors hoping for economic recovery are still looking for stability in financial markets but the lack of visibility on the earnings front is unnerving. Citigroup and AIG surged but other regional banks declined.

In Europe, stocks advanced on the hopes that European governments will provide additional assistance to banks and loan funds to purchase illiquid mortgage securities. The optimism also ran high after UK based Barclays suggested that the business for the first two months is stronger than earlier anticipated and the company may sell its popular exchange traded funds or ETF business.

Stocks in Japan closed higher on the optimism that governments of twenty largest nations will spend more money to prop up local economies. U.S. Treasury Secretary urged other nations at a meeting over the weekend to spend as much as 2% of gross domestic product of their local economies. Real estate stocks in Japan rose on the hopes that Tokyo condo sales are nearing a bottom. February inventory of unsold Tokyo region condos dropped below 10,000 units.

Foreign direct investments in China declined in February, fifth monthly decline in a row. The investment in the month dropped 16% to $5.83 billion from a year ago after declining 32% in January from a year ago period.

North American Markets

Dow Jones Industrial Average declined 7.01 or 0.1% to a close of 7,216.97, S&P 500 Index decreased 2.66 or 0.35% to 753.89, and Nasdaq Composite Index declined 27.48 or 1.9% to close at 1,404.02.

Of the stocks in S&P 500 index, 210 increased, 286 decreased and 4 were unchanged. Of the index stocks, 2 fell more than 3%, 29 closed above 3%.

AIG led gainers in the S&P 500 index with a surge of 66% followed by increase in Citigroup Inc of 31%, in Huntington Bancorp of 12.8%, in Gannett Company of 12.2%, in Textron Inc of 11.2% and in Newell Rubbermaid of 10%.

CB Richard Ellis led decliners in the S&P 500 index with a loss of 14.7% followed by declines in Prologis of 14.4%, in Apartment Investment Company of 14.4% and in Kimco Realty of 13.8%.

South American Markets Indexes

Markets in Mexico closed. On Friday, Mexico Bolsa Index increased 572.14 or 3.03% to 19,437.01. Brazil Bovespa Stock Index declined 408.17 or 1.05% to 38,607.20.

Argentina declined 0.9%, Chile gained 0.5%, Peru surged 3.8% and Colombia increased 0.7% and Venezuela soared 4.6%.

Europe Markets Review

In London FTSE 100 Index closed higher 110.31or 2.94% to 3,863.99, in Paris CAC 40 Index increased 86.03 or 3.18% to close at 2,791.66 and in Frankfurt DAX index higher 90.94 or 2.30% to close at 4,044.54. In Zurich trading SMI increased 89.69 or 1.90% to close at 4,816.43.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 134.87 or 1.78% to 7,704.15, Hang Seng index in Hong Kong increased 450.91 or 3.60% closed to 12,976.71, CSI 300 index in China higher 36.19 or 1.64% closed to 2,241.61. ASX 200 index in Australia increased 3.20 or 0.10% closed to 3,348.40. The KL Composite index in Malaysia lower 2.57 or 0.30% closed to 840.88.

The Kospi Index in South Korea decreased 0.57 or 0.05% to close at 1,125.46. SET index in Thailand closed lower 0.18 or 0.04% to 424.61 and JSE Index in Indonesia decreased 2.59 or 0.20% closed to 1,324.85. The Sensex index in India increased 186.93 or 2.13% closed to 8,943.54.

Commodities, Metals, and Currencies

Crude oil increased 1.5% or $0.71 to close at $46.96 a barrel for a front month contract, natural gas decreased 6 cents to $3.87 per mBtu and gasoline futures increased 5.08 cents to close at 84.35 cents per gallon.

Wheat futures closed up 17.00 cents in Chicago trading and closed at $5.99 a bushel. Sugar decreased 0.04 cents in trading at 10.98 cents a pound. Soybean future closed up 37.5 cent to $9.56 a bushel.

Gold increased $23.10 in New York trading to close at $871.10 per ounce, silver closed up 36 cent to $10.72 per ounce and copper for the front month delivery increased 4.4 cents to $1.3175 per pound.

Dollar edged lower against euro to $1.2973 and fell against yen to 98.230.

Yields on 10-year U.S. bonds increased to 2.95% and with 30-year maturities increased to 3.76%.