Ahead of Earnings U.S. Stocks Fall

123jump.com Staff
06 Apr, 2009
New York City

Techs and banks closed lower after rising for nearly a month. Investors now focused on soon to be released earnings are nervous that though stocks are cheaper compared to a year ago but may have a room fall further. Banks fell on beaish views from an analyst.

5:00PM New York, 11:00PM Frankfurt, 8:00AM Sydney[R]– Techs and banks closed lower after rising for nearly a month. Investors now focused on soon to be released earnings are nervous that though stocks are cheaper compared to a year ago but may have a room fall further.[/R]

Global Markets

U.S. stocks edged lower on worries that banks may have to face more write-offs and tech sell-off. IBM and Sun may have ended their exclusive talks seeking Sun acquisition at $7 billion.

Banks in New York and in Japan fell. Bearish bank analyst Mike Mayo at Calyon Securities expressed negative or weak views on eleven large and regional banks. His views, though widely shared among investors still drew attention after he estimated that loan losses this year at banks may exceed those during the Great Depression era. The comparison with one of the most difficult times in the U.S. economy dragged stocks in the sector lower.

Banks in Japan are likely to take higher charges linked to failed investment in the U.S. and UK banks in the midst of sharp fall. And, EU investigators send a list of charges to Visa Europe regarding its fees.

Sun Microsystems, Inc led the decliners in the S&P 500 index with a loss of 23.7%. U.S. stocks in the morning traded lower after the negotiations between IBM and Sun Microsystems ended with no deal, weak banking stocks on analyst downgrade and Treasury Secretary Geithner comments.

Central banks in Japan, UK and Europe provided additional currency swap arrangements to the U.S. Fed. The additional foreign currency swaps will provide liquidity to the Federal Reserve to support banks and additional lending.

In London trading stocks closed lower tracking losses in miners and financials. HSBC jumped 5% after it managed to place 97% of its rights offering and raise £12.85 billion at 50% discount to a price a year ago. The bank may need to raise more capital if losses at its U.S. unit rise.

Stocks in Australia closed higher despite a fall in commodities and crude oil prices. Australian job ad placement declined in March indicating a further rise in unemployment. Jobs ads declined 8.5% from February and plunged 54% from a year ago.

The benchmark stock index in Japan gained 1.2% after finance minister Kaoru Yosano said the government will unveil a $100 billion stimulus plan. Bank of Japan in its two-day policy meeting is considering to expanding the collateral for bank lending.

Stocks in Hong Kong gained 3% after HSBC received favorable response from investors. The troubled bank raised $18.5 billion through rights issue. HSBC closed up 5.3%. Separately, production of chemicals gained 2.4% in the first two months of this year.

North American Markets

Dow Jones Industrial Average decreased 41.74 or 0.52% to a close of 7,975.85, S&P 500 Index decreased 7.1 or 0.8% to 835.48, and Nasdaq Composite Index declined 15.16 or 0.9% to close at 1,606.71.

Of the stocks in S&P 500 index, 132 increased, 363 declined and 5 were unchanged.

Sun Microsystems led decliners in the S&P 500 index with a loss of 22.7% followed by losses in SunTrust Banks of 8.1%, in Ensco International of 7.6%, in Lincoln National Corp of 7.5%, in Office Depot of 7.2%.

Ford Motor Company led gainers in the S&P 500 index with a rise of 16% followed by gains in Textron Inc of 11.3%, in Northrop Grumman of 9.0% and in Lockheed Martin of 8.9%.

South American Markets Indexes

Mexico Bolsa Index decreased 126.57 or 0.6% to 20,807.21. Brazil Bovespa Stock Index lost 223.72 or 0.50% to 44,167.26.

Argentina benchmark index decreased 1.0%, Chile declined 0.24% and Peru increased 1.8%. Colombia increased 0.1%. Venezuela Stock Market index was unchanged.

Europe Markets Review

In London FTSE 100 Index closed lower 36.13 or 0.90% to 3,993.54, in Paris CAC 40 Index decreased 28.99 or 0.98% to close at 2,929.75 and in Frankfurt DAX index lower 35.18 or 0.80% to close at 4,349.81. In Zurich trading SMI decreased 40.91 or 0.81% to close at 5,002.08.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 108.09 or 1.24% to 8,857.93, Hang Seng index in Hong Kong increased 452.35 or 3.11% closed to 14,998.04.The ASX 200 index in Australia increased 21.00 or 0.56% closed to 3,756.60. The KL Composite index in Malaysia higher 16.76 or 1.85% closed to 923.77.The Markets of China were closed today.

The Kospi Index in South Korea increased 14.10 or 1.10% to close at 1,297.85.The JSE Index in Indonesia increased 16.28 or 1.09% closed to 1,516.64. The Sensex index in India increased 186.04 or 1.80% closed to 10,534.87. The Markets of Thailand were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $1.18 to close at $51.33 a barrel for a front month contract, natural gas decreased 6 cents to $3.74 per mBtu and gasoline futures decreased 0.99 cents to close at 148.25 cents per gallon.

Wheat futures closed down 6.50 cents in Chicago trading and closed at $5.5750 a bushel. Sugar decreased 32 cents in trading at 12.85 cents a pound. Soybean future closed down 1.50 cent to $9.94 a bushel.

Gold decreased $25.60 in New York trading to close at $871.70 per ounce, silver closed down $0.61 to $12.130 per ounce and copper for the front month delivery decreased 3.65 cents to $1.9640 per pound.

Dollar edged higher against euro to $1.3412 and gained against yen to 101.03.

Yields on 10-year U.S. bonds increased to 2.92% and with 30-year maturities closed up to 3.72%.