U.S. Stocks Retrench, Banks Fall

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

U.S. stocks closed lower a day after surging more than 7%. Treasury Secretary and Fed chairman asked for additional powers to deal with non-banking institutions that pose systemic risks. Fed offered a buying schedule to purchase $300 billion of Treasuries.

5:00PM New York, 11:00PM Frankfurt, 8:00AM Sydney[R]– U.S. stocks closed lower a day after surging more than 7%. Treasury Secretary and Fed chairman asked for additional powers to deal with non-banking institutions that pose systemic risks. Fed offered a buying schedule to purchase $300 billion of Treasuries.[/R]

Global Markets

U.S. markets closed lower a day after the best one-day performance this year. Commodities and stocks declined.

Treasury Secretary and Fed chairman in their testimony to U.S. House Financial Services Committee asked for additional authorities to wind down non-banking financial institutions. AIG, the insurance giant operated more like a hedge fund and wrote insurance on mortgage bonds that fell outside the review and authority of the regulatory arms of the U.S. agencies.

Stocks after four hours of trading were up after trading down for the most part of the day. Carnival Corp rose after it reported better than expected earnings. MGM Mirage fell after its partner in Dubai sough court order to cancel the partnership. Newell Rubbermaid Inc plunged 10% on weaker outlook.

European markets closed higher for the second day on the optimistic view of the banking solution from the U.S. Treasury. Deutsche Bank and Credit Suisse gained but Societe Generale fell. Metro AG fell after it reported 7.1% rise in earnings for the year. S&P lowered its view on Lithuania. UK inflation accelerates. ArcelorMittal launches 1.1 billion euros convertible debt offering. Asian stocks surged on the back of a rise in New York.

Steelmakers in Tokyo trading gained after BHP Billiton agreed for 57% price cut for coking coal supply. Iron ore prices are also expected to fall as much as 50%. Banks and financials surge after the U.S. proposed a plan to purchase toxic assets. Auto Sales in Japan are expected to dip to 32-year low.

China calls for the establishment of super currency that is not dependent upon one country. The call for the global currency reform comes ahead of meeting of G-20 nations and the worry that China may suffer if inflation accelerates in the U.S.

Prime Minister Singh in India suggested that the economy will regain its vigor in the next six months as economic stimulus takes hold. Rupee declined in the trading as crude oil rallies in the recent months and exports remain weak. Reliance gained but IT stocks declined.

Australian personal insolvencies rise 12.2% in 2008. Iron ore contract prices are expected to fall after BHP lowered prices by 57% the coking coal delivered from next week. Resources stocks traded mixed as worries of falling world prices and high operating cost linger for the industry.

North American Markets

Dow Jones Industrial Average fell 115.89 or 1.5% to a close of 7,659.97, S&P 500 Index declined 16.67 or 2.03% to 806.25, and Nasdaq Composite Index declined 39.25 or 2.5% to close at 1,516.52.

Of the stocks in S&P 500 index, 98 increased, 399 declined and three were unchanged.

Huntington Bancorp led decliners in the S&P 500 index with a loss of 15.8% followed by losses in Prologis with a loss of 14.6%, SLM Corp of 12.7%, in Dynegy Inc of 12%, in Jabil Circuit of 11.6% and in Nasdaq OMX Group of 11.4%.

Allergan Inc led gainers in the S&P 500 index with a rise of 13.9% followed by gains in International Paper Company of 12.6%, in JDS Uniphase of 7.9%, in McGraw-Hill of 7.7% and in Hospira Inc of 7.4%.

Wells Fargo & Company dropped 10% after surging more than 24% in yesterday’s rally. Simon Property, Equity Residential Trust declined 9.4% and Boston Properties fell 8%.

South American Markets Indexes

Mexico Bolsa Index decreased 103.82 or 0.5% to 20,242.61. Brazil Bovespa Stock Index dropped 962.72 or 2.27% to 41,475.83.

Argentina markets were closed today, Chile decreased 0.2% and Peru added 2.4%. Venezuela added 1.5% and Colombia increased 0.9%.

Europe Markets Review

In London FTSE 100 Index closed lower 41.35 or 1.05% to 3,911.46, in Paris CAC 40 Index increased 4.82 or 0.17% to close at 2,874.39 and in Frankfurt DAX index higher 10.99 or 0.26% to close at 4,187.36. In Zurich trading SMI decreased 7.41 or 0.15% to close at 4,923.66.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 272.77 or 3.32% to 8,488.30, Hang Seng index in Hong Kong increased 462.92 or 3.44% closed to 13,910.34, CSI 300 index in China higher 12.39 or 0.51% closed to 2,451.78. ASX 200 index in Australia increased 29.70 or 0.84% closed to 3,580.00. The KL Composite index in Malaysia lower 0.38 or 0.04% closed to 877.92.

The Kospi Index in South Korea increased 22.20 or 1.85% to close at 1,221.70. SET index in Thailand closed lower 0.01 or unchanged to 438.16 and JSE Index in Indonesia increased 29.47 or 2.09% closed to 1,436.12. The Sensex index in India increased 47.02 or 0.50% closed to 9,471.04.

Commodities, Metals, and Currencies

Crude oil decreased $0.42 to close at $53.38 a barrel for a front month contract, natural gas increased 4.8 cents to $4.342 per mBtu and gasoline futures increased 0.87 cents to close at 149.68 cents per gallon.

Wheat futures closed down 14.25 cents in Chicago trading and closed at $5.35 a bushel. Sugar decreased 41 cents in trading at 13.00 cents a pound. Soybean future closed up 11.50 cent to $9.67 a bushel.

Gold decreased $27.30 in New York trading to close at $927.50 per ounce, silver closed down $0.465 to $13.41 per ounce and copper for the front month delivery decreased 4.40 cents to $1.7970 per pound.

Dollar edged higher against euro to $1.3466 and gained against yen to 97.75.

Yields on 10-year U.S. bonds increased to 2.70% and with 30-year maturities decreased to 3.64%.