Bank Stress Test Worries, Stocks Fall

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

Stocks in New York fell on renewed worries that stress-test results may require banks to raise more capital. UK in its latest budget estimated economy to shrink and proposed to borrow nearly double than its previous estimate. Japan recorded its first annual deficit.

5:00PM New York, 11:00PM Frankfurt, 8:00AM Sydney[R]– Stocks in New York fell on renewed worries that stress-test results may require banks to raise more capital. UK in its latest budget estimated economy to shrink and proposed to borrow nearly double than its previous estimate. Japan recorded its first annual deficit.[/R]

Global Markets

U.S. stocks edged higher in the morning after a flood of earnings news met most investors’ expectations of lowered earnings. Stocks in the final hour of trading fell on the weakness in financials. Memory chips makers gained in the morning trading on probable price increase from the recent lows. Morgan Stanley declined after it reported wider than expected losses.

UK in Budget 2009 proposed to increase tax for the upper income earners, sharply increase the borrowings and increase public spending to support housing markets and banks. The pound, stocks and bonds fell after the government plans to sell £220 billion of bonds this year.

Japan registered its first annual trade deficit in thirty years. Exports and imports declined in March but at a slower pace than in February. Weak exports from Japan to China and U.S. continue to affect global trade. Japan may bailout Elpida Memory and Pioneer using public funds.

A sharp fall in world trade has led China Cosco to delay three of its nine container liners orders and may delay unknown number of commodity vessels. China Shipping Container Lines Co also estimated loss in the first quarter. Jiangxi Copper first quarter net income dropped 89% from a year ago.

BHP reported that it is selling 28% of its iron ore output in the spot market as more steelmakers in China and Japan defer the demand. The spot prices are at least 33% lower than the contract prices. Australian inflation dipped at the end of the first quarter dimming the prospect of rate cut.

North American Markets

Dow Jones Industrial Average decreased 82.99 or 1.04% to a close of 7,886.57, S&P 500 Index declined 6.53 or 0.8% to 843.55, and Nasdaq Composite Index gained 2.27 or 0.2% to close at 1,646.12.

Of the stocks in S&P 500 index, 379 increased, 129 declined and 1 was unchanged.

Zions Bancorp led decliners in the S&P 500 index with a loss of 19.4% followed by losses in New York Times of 18%, in KeyCorp of 8.3%, in Apollo Group of 7.3%, in Apollo Group of 7.3% and in Broadcom Corp of 19.8%.

Tenet Healthcare led gainers in the S&P 500 index with a surge of 42% followed by gains in Qlogic Corp of 18%, in US Bancorp of 16.4%, in State Street Corp of 16.3%, in Coach Inc of 15.9% and in Aflac Inc of 14%.

South American Markets Indexes

Mexico Bolsa Index increased 263.07 or 1.3% to 21,480.01. Brazil Bovespa Stock Index added 455.05 or 1.02% to 44,888.20.

Argentina Merval Index added 0.5%, Chile Stock Market Select index added 0.3% and Peru Lima General Index increased 0.4%. Colombia IGBC General Index edged down 0.02% and Venezuela Stock Market Index edged higher 0.27%.

Europe Markets Review

In London FTSE 100 Index closed higher 43.20 or 1.08% to 4,030.66, in Paris CAC 40 Index increased 51.30 or 1.72% to close at 3,025.24 and in Frankfurt DAX index higher 92.79 or 2.06% to close at 4,594.42. In Zurich trading SMI decreased 13.02 or 0.26% to close at 5,063.70.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 15.97 or 0.18% to 8,727.30, Hang Seng index in Hong Kong decreased 407.44 or 2.67% closed to 14,878.45, CSI 300 index in China lower 99.16 or 3.71% closed to 2,576.28. ASX 200 index in Australia decreased 9.20 or 0.25% closed to 3,668.20. The KL Composite index in Malaysia higher 1.98 or 0.20% closed to 968.58.

The Kospi Index in South Korea increased 19.21 or 1.44% to close at 1,356.02. SET index in Thailand closed lower 5.76 or 1.24% to 460.62 and JSE Index in Indonesia decreased 13.62 or 0.84% closed to 1,615.23. The Sensex index in India decreased 80.57 or 0.74% closed to 10,817.54.

Commodities, Metals, and Currencies

Crude oil increased $0.14 to close at $48.69 a barrel for a front month contract, natural gas decreased 0.9 cent to $3.52 per mBtu and gasoline futures decreased 2.94 cents to close at 138.50 cents per gallon.

Wheat futures closed up 7.25 cents in Chicago trading and closed at $5.28 a bushel. Sugar increased 0.12 cent in trading at 13.55 cents a pound. Soybean future closed up 6.50 cent to $10.39 a bushel.

Gold increased $9.70 in New York trading to close at $892.40 per ounce, silver closed up $0.22 to $12.85 per ounce and copper for the front month delivery decreased 3.95 cents to $2.0405 per pound.

Dollar edged lower against euro to $1.3002 and edged lower against yen to 97.96.

Yields on 10-year U.S. bonds increased to 2.94% and with 30-year maturities closed up at 3.81%.